As someone who travels a lot, and spends time in a good many cities around the world, I was shocked/not surprised by the new Cost of Living Index put out twice a year by the website Numbeo.com. The site’s mid-year rankings cover more than 200 cities around the world, in order of how much it costs to live in them. It jibes with my impressions, especially about the United States – but also about Europe and Japan.
Short take: It’s getting a lot more expensive out there.
The mid-year list doesn’t include either Sacramento nor Kyoto, two of my more important homes, so I am going back to the annual 2024 list from January, which lists them both among more than 350 cities. Even from just seven months ago, the change in status of many familiar places is remarkable. The cost of living in Berlin, in particular, has risen in ways that match my experience of the place.
When I first visited Berlin, in 2017, I was shocked at how cheap the city was, especially things like groceries – but rents as well. And indeed, in 2017, Berlin’s cost of living was ranked #264, below Kingston, Jamaica, Nottingham, England, and Boise, Idaho. It was way below other major European cities like Paris, Barcelona and even Naples and my beloved Bologna, Italy.
But this January, Berlin came in at #114, a skyrocket that few Berliners would argue with. And it gets worse: The mid-2024 list, just out, puts my adopted home even higher, at #56 (of far fewer cities). But introducing this more recent list really throws off the comparisons, because so many cities are left out. So I’ll stick with the annual report for today’s comparisons.
Of course, these figures should be taken with a grain of salt (or sugar); they are cobbled together from data samples from a wide variety of sources, and while numbers are a good indicator, they aren’t the last word. Prices vary wildly even within any given city. But the good folks at Numbeo.com have been doing these lists since 2009, so I’m sure they’re as accurate as they can be with measurements so big and ostensibly all-encompassing.
A caveat: Berlin’s leap from #264 to #114 doesn’t mean prices have doubled in seven years. Rents are a relatively stable thing everywhere, except over the long term; staples are still affordable, depending on what you consider a staple, unless you’re in a hyper-inflationary environment like Argentina.
These figures can sound catastrophic, but catastrophe has not been visited on Berlin. (One can’t say the same for Argentina.)
Still: It’s all relative, and those relative Berlin rankings, from 2017 to 2024, #264 to #114, remain shocking.
But even they aren’t as shocking as are the rises in costs of cities in my home country, the United States of America.
Back in the day – say, again, 2017 – the most expensive cities in the world were in Switzerland and Norway, with the occasional big American, European or Japanese city thrown in (Venice was #12, New York was #16, and Tokyo was #26.)
But in this most recent list, American cities have eclipsed nearly all of them. Sure, Switzerland has five of the top 6, with only Hamilton, Bermuda topping all at #1. Switzerland is a land all its own.
But below those, fully half – 10 of the top 20 – are cities in the United States. Sacramento, my old hometown, is now (well, was, in January, it doesn’t make the mid-year short list) at #20! In 2017, it was #79.
My official home address in the US is just outside of Portland, a city which is now the 22nd most expensive city in the world in the annual report – and at mid-year is #15! This puts modest Portland above Singapore, Chicago, Copenhagen, Denmark, and even London, England! Paris, France is at #46.
This is mind-blowing to me, as it probably is to friends and family on the Best Coast. Except that when I go home to Sacramento and Portland, as I did last summer, and will again in a month, my jaw drops at how expensive even the most basic things are. I couldn’t afford to live there anymore – even if I wanted to!
This is true especially when compared to Europe. Italy’s cities have gotten cheaper (Venice and Firenze have both dropped out of the Top 50 since 2017, and even expensive Milano, where I write this, is at #79). London is, of course, ridiculously expensive, having leapt from #67 in 2017 to #27 in January.
But that still puts London below Sacramento and Portland!
By and large, Europe remains affordable, save for the usual suspects: Switzerland and Scandinavia. But even Oslo, Norway (dropping from #13 to #29) and Stockholm, Sweden (#53 to #89!) have dropped considerably, as the US cities rise. Tampa, Florida and Atlanta, Georgia are more expensive than either of them.
This sucks if you live in the USA, though most Americans have considerably higher salaries than nearly all Europeans, as I can personally attest to. (There are stats for that, of course, but I’m already pushing everyone’s tolerance for numbers here.)
But for Americans in particular, though life is more expensive at home, it’s considerably cheaper elsewhere, and places that used to seem dauntingly expensive, have seen prices drop considerably, along with exchange rates vis a vis the US dollar. (It drives me crazy when Americans complain about “American decline.” Our country really is the envy of the world, except perhaps for the sheer ignorance and stupidity of many of its voters.)
Prices in Japan are an example of the above. As I regularly spend time there, I have seen a crazy drop since my first visit in 2016. Prices have dropped considerably, and an American’s position in particular is helped by a simultaneous drop in the value of the Japanese yen against the dollar. Hence the flood of American tourists I saw in April in Kyoto.
Tokyo, #26 in 2016, is currently at #169, below Cincinnati, Ohio! But the sushi and ramen remain far better…
Fortunately, the other places I visit regularly, India and Vietnam, remain different economic worlds. Affordable ones.
In fact, even dear Saigon (Ho Chi Minh City) has risen a bit: From #366 in 2017 to #310 in January. But that’s a rise I can live with; and do. And will continue to.
And of course, India remains India, one of the poorest countries in the world, and most of its cities remain near or at the bottom of the list, saved from absolute bottom only by neighboring Pakistan.
Again, all of these figures are inexact; Mumbai is in India sits at #351, but my cheap hotel there this winter was $30, not a lot cheaper than decent places in a lot of Europe and certainly Vietnam and Japan. So it depends very much on how you live, and where in each city; lifestyles may vary. A cappuccino in Mumbai costs more than it does in Italia…then again, that’s a luxury item in Mumbai.
I could go on, but you get the point: Yes, prices are up in some places, but some of the places we may have thought are unaffordable (Tokyo, for instance) have changed. Even Scandinavia!
Americans who take this as a reason to vote for an authoritarian party, because “Dear Leader will get prices under control” don’t understand how things work. This is a global phenomenon, and even where it’s not happening – in Japan, for instance – it’s not necessarily a good thing. The Japanese are losing purchasing power in general, and lower prices don’t really help so much.
It’s complicated, but I hope that puts things in a little bit of perspective, courtesy of the good quants at Numbeo.com.
Onward.