New York City is now one of the two most expensive cities in the world, according to data released by the Economist Intelligence Unit.
The Big Apple, where the average resident pays as much as $5,000 each month in rent, is tied with the city-state of Singapore, which has held the top position for eight of the last 10 years as inflation continues to grip metropolitan areas across the globe. The two cities were followed by Tel Aviv, Israel; Hong Kong; and Los Angeles, California.
“A stronger currency will tend to see a city rise in the rankings, as prices are higher when expressed in international common currency,” the Economist Intelligence Unit said of New York and Singapore, two of the planet’s most important financial hubs. “Structural factors such as competition or high demand play a key role in determining the cost of living as well.”
Rounding out the world’s most expensive cities are Zurich and Geneva, Switzerland; San Francisco, California; Paris, France; Copenhagen, Denmark; and Sydney, Australia. Beyond home and apartment rents, the outlet considered prices for food, utilities, clothing, transportation, schooling, and other essentials.
The largest upward movers in the rankings were the Russian cities of Moscow and St. Petersburg. Exchange rates for the ruble have increased precipitously because of suppressed imports, capital controls, and European nations making natural gas payments with the currency. For similar reasons, five of the biggest downward movers were cities in Europe; according to the outlet, “the energy crisis that has followed Russia’s invasion of Ukraine is tipping the continent into recession and depreciating currencies” against the dollar. Indeed, the euro reached parity with the dollar this year as the continent’s economy struggles.
The cheapest metropolitan areas, however, were the Middle Eastern cities of Damascus, Syria; Tripoli, Libya; and Tehran, Iran. Cities in southern Asia, such as Colombo, Sri Lanka; Chennai, India; and Karachi, Pakistan, were also among the least expensive.
Cities in the United States — including Atlanta, Georgia, and Boston, Massachusetts — account for six of the top global movers. Apartment rental markets remain heated across the country, with the national average rent for a one-bedroom apartment surpassing $1,500 earlier this year.
Rising mortgage rates induced by efforts from the Federal Reserve to control inflation by hiking target federal funds rates have caused a spillover effect into rental markets. The National Association of Home Builders’ Housing Opportunity Index shows that a mere 42.2% of American families earning $90,000 annually were able to afford new and existing homes sold between the beginning of July and the end of September.
“The housing market and affordability conditions have continued to weaken throughout the year as rising mortgage rates, supply chain bottlenecks and a lack of skilled construction workers continue to push housing costs higher,” National Association of Home Builders Chairman Jerry Konter said in a statement. “Entry-level buyers are particularly hurt, as more of them are getting priced out of the market.”