The cost of living is an important consideration when thinking about global travel, moving to a new place, or extending a business. There are many cities in the world that have great potential, but they certainly do have a cost. Some cities’ living costs can deter expatriates, tourists, and businesses, influencing their financial decisions. Knowing the most expensive cities can aid in future planning and decision-making.
Most Expensive Cities - Introduction
Different observational and survey studies have been done every year to identify the most expensive cities in the world, including housing, grocery, and transportation costs. These cities are business centers or have high expatriate populations since they provide a good standard of living, which, however, comes at a price. Some of the reasons for the high cost of these cities include strong currencies, high demand for properties, inflation, and a thriving economy.
This article describes the most expensive cities in the world in detail, looking at the factors that make them so expensive and how they affect the expatriates and residents.
What is the Most Expensive City in the World?
Every person will have their own opinion on the most expensive city in the world. Establishing the particular ranking of the cities in accordance with the cost may depend heavily on the chosen criteria. There are a number of notable institutions, however, that issue regular lists of cities ordered by cost of living, such as the Economist Intelligence Unit (EIU), Mercer, and Seven Seas Worldwide.
Hong Kong is seemingly always ranked the most expensive city in the world, with estimates being that it has high real estate housing prices and a closet of luxury properties that are difficult to find. It is only followed by other countries such as Zurich and Singapore, which are also wealthy and have a high demand for space and real estate, which means that living is rather expensive in these regions.
But what are the factors contributing to the high ranking of these cities? It is a mixture of thriving economic activities in areas, higher wage rates of employees, limited availability of land for development, and high development costs involved in housing. These cities are the most traffic-congested cities in the world. For expatriates and local populations, these variables mean a relatively high cost of living in all aspects of life, whether buying food, entertainment, or government services.
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Costliest Cities in the World
The costliest cities in the world can be described as financial centers, business cities, or the center of wealth concentration. High-net-worth individuals and expatriates rely on such cities because of the economic and lifestyle benefits, but the cost of living rises.
For instance, a growing business ecosystem in Singapore allows it to thrive, but being a small island nation with land scarcity causes real estate prices to be high. Just like in Switzerland, cities such as Zurich and Geneva come with a high standard of living. However, such is their funding and protection, and costs for health, housing, and education are also high. Yet, another case worth mentioning is New York City, which is typically known for its expensive rents and high transport rates along with other everyday necessities like grocery shopping or paying for utilities.
The list of smart cities in the world also changes with time, and new players join this tough competition. Economic factors like inflation, increased utility costs, and rising demands for cheaper accommodation also add value in pushing cities around in the list.
Most Expensive Cities in the World
According to The Economist Intelligence Unit and Mercer’s Cost of Living Survey, it is unfortunate that someone would have carried these lists and put them in some order for the world's most expensive cities list in 2025. Inflation has gone up across the globe, and so have currency exchange rates, so here’s a projected list:
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Hong Kong
Hong Kong is the world’s most expensive city due to its housing market. The average rent for a simple, decent one-bedroom apartment is about $3500, and more so when considering its prime real estate location.
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Zurich, Switzerland
If one had to name a European country that has all the trappings of luxury and glamour, then Zurich would be that ideal nation. Thanks to its stable currency, booming financial industry, and excellent quality of life, Zurich does not disappoint. Housing, medical services, and consumer products, on the other hand, seem to be slightly expensive.
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Tokyo, Japan
In the list of the most expensive cities in the world, Tokyo ranks highly for obvious reasons. It is known for its cost-effective services. Tokyo is a major center and a growing global city. The cost of housing has skyrocketed due to demand and, along with that, average living expenses as well.
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Singapore
Without a doubt, Singapore has one of the hottest property markets today. A variety of small areas and high levels of demand for reasonable living space, together with the strong economy, make it a fixture on the list.
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New York City, USA
New York is one of the most expensive cities in the US. The Big Apple has some of the highest rents in the world. In Manhattan, for instance, the rent rate for a single studio is considered rather extreme. The prices for dining, transportation, and even healthcare services add to the overall exorbitance.
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Paris, France
The city of Paris has perhaps the most romantic atmosphere. However, this does not come cheap. France’s real estate prices are always on the rise, and spending on entertainment, gastronomy, and even public services places Paris near the top of the world’s most expensive cities.
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Geneva, Switzerland
Geneva is considered one of the most expensive cities in the world, especially for expats, owing to its high standard of living and abundance of international diplomats. High salary also corresponds to high prices for household items.
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Tel Aviv, Israel
In the last few years, Tel Aviv has rapidly moved to one of the most expensive cities in the world – all thanks to its high demand for real estate and a booming economy in general.
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Copenhagen, Denmark
Copenhagen has a high environmental performance but great public service, which is expensive. The capital of Denmark has some of the most expensive properties for the wealthy and high-end consumer economy.
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Shanghai, China
Shanghai has been emerging as China’s main economic core and is quickly becoming one of the most pricey cities. With its luxurious apartments, expensive foreign products, and a large inflow of foreigners, the cost of living has been very high.
It is expected that in 2025, these 10 most expensive cities in the world will still maintain their ranking despite the fluctuation in order as a result of the general economic forces in charge of the costs of living.
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Cost of Living City Ranking 2025
The 2025 cost of living index includes the basic needs of any person, such as shelter, education, healthcare, utilities, and entertainment. In smart cities such as Hong Kong and New York, rental costs are responsible for soaring costs. For instance, one can expect to pay a minimum of $3,000 for even a small apartment in Manhattan or the center of Hong Kong, excluding the other costs of travel, utility bills, and food.
In Zurich, ease in the usage of consumer goods, along with expensive housing costs and high wages, ensures that the city remains ranked within the list of the most expensive cities to live in. Other cities in Europe include Paris and Geneva, which are also strategically ranked because of their costly real estate markets and luxurious goods markets.
The phenomenon experienced in the cost of living city ranking in the last few months has been the escalations of cities like Tel Aviv and Shanghai. Many did experience enormous development and, therefore, an increase in wages and the levels of available modern amenities. However, this also accompanied the increase in the cost of living, especially for foreign workers.
Why are These Cities So Expensive?
Factors that make these cities the most costly in the world :
- High Demand for Real Estate: In places like Hong Kong, New York, and Singapore, where land is scarce and the population is dense, the cost of real estate skyrockets because of demand. This causes a knock-on effect to rent all the way to tax on property.
- Currency Strength: On the other side, countries like Zurich and Tokyo, whose local currencies are strong, tend to be pricey since foreign currencies tend not to be able to afford much, making living as an expat quite expensive.
- Inflation and Cost of Goods: Global inflation, on the other hand, continues to distort normal expenditure patterns in areas as basic as food to transport. This has been further compounded in cities like Paris and Geneva, where there is always a high demand for expensive, ostentatious products and high-quality services.
- Quality of Life: The high cost of living is also due to the high spending on public services, health care, or education in cities like Zurich or Copenhagen, which have an overall high quality of life.
Summing Up - Most Expensive Cities in the World
With vibrant economies, potential job opportunities, and living standards, the economist's most expensive cities offer multiple advantages. It, however, comes at a cost, and most deserving middle-income earners are forced to make ends meet in the other aspects of life. Living expenses largely depend on rents and property prices in cities like Hong Kong, Zurich, and New York, as well as average daily expenditure on other services, food, traveling, in that order, and health services.
People intending to travel to these cities handicap themselves with the knowledge of the cost of living in these places. It could be the typically sophisticated atmosphere in Geneva, the attention-grabbing lifestyle in New York City, or Singapore's technology-centered surroundings, and these cities present a unique experience at a significant cost.
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FAQs - Most Expensive Cities in the World
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What factors make a city expensive to live in?
There are many reasons why a city becomes expensive. The first reason is the heavy dependence on real estate: the demand is always higher than the supply. Secondly, inflation is quite typical in a region with a strong currency exchange rate. Thirdly, the costs of goods and services range higher in countries where a higher standard of living is offered – cities with better and more developed healthcare and education services will generally have a higher living cost.
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Which city has the highest rent prices?
Hong Kong remains on top among other cities in terms of rent prices. The area of land is small, and the number of those willing to buy or rent is very large. Small houses may rise to thousands of dollars a month in rent.
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Why is Zurich ranked in the list of costliest cities?
Zurich is one of the world’s costliest cities, and a considerable number of the population earn their living in the city’s financial industry. In Zurich, there are factors that contribute to this ranking in its way too — Swiss solid currency, high-income levels, expensive property, as well as expensive consumer goods, health care services, and education.
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Is being an expatriate that good in all costly cities?
Most of these expensive cities are very good in terms of opportunities for work, high salaries, and good public services. Still, they can be discouraging to some expatriates who may be working within a limited budget. One of the most expensive cities for expatriate employees is New York, and one of the most expensive regions of this city is Tokyo. It would be reasonable to emphasize that it is quite hard for expatriates to gauge the housing cost, health care cost, education, and other living costs before moving.
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Considering all factors, which U.S city can be termed expensive?
In New York City, approximately one out of four people has a salary over six figures, which gives them a comfortable life. It is perhaps not surprising that income level directly corresponds with living expenses since New York City has both high living expenses and a high cost of living.
