Mediaboss Marketing

Wellington and Auckland have become among the most expensive cities in the world for expatriates to live in.

But local residents may have gained some benefit from the key factor behind the rise in costs to new arrivals - the strengthening of the New Zealand dollar.

According to the Economist Intelligence Unit's (EIU) latest Worldwide Cost of Living survey, Auckland is now the 15th costliest city in the world, up from 24th previously, while Wellington rose 16 places to be equal 17th with London.

The index measures the cost of an expatriate lifestyle in over 130 cities using a weighted average of the prices of 160 products and services.

EIU editor Jon Copestake said the cost of living in Auckland and Wellington had doubled for expatriates in the past decade.

New Zealanders would not have noticed that sort of rise, although they might have noticed living costs "creeping up", Copestake told Radio NZ.

Supply side inflation pushing up the cost of living in the past few years had fed into many economies.

"But the main issue here is currency movement. It seems that the New Zealand dollar and the Australian dollar have become haven currencies. They've had a lot of investment in them over the last few years. And this is what's really driven the rise up the rankings for New Zealand and Australian cities," Copestake said.

"People coming into New Zealand will see the relative cost of living much higher. I think in fact, in a sense, there's a benefit to Wellington and Auckland people in that they might actually see the cost of imports going down because things will become relatively cheaper in other currencies, and they will actually find maybe the cost of travelling abroad slightly cheaper."

While there were advantages in that respect, the two cities were becoming uncompetitive in price terms.

But Copestake also identified another reason for residents of Auckland and Wellington to relax, pointing to an apparent growing correlation between being an expensive city internationally, and being ranked among the most liveable cities.

"So in a sense, the fact that there's a high cost of living in Wellington and Auckland is probably also partly reflected in the high liveability you can enjoy in those cities."

The EIU living costs survey ranked Sydney in seventh place, Melbourne eighth, Perth 12th, Brisbane 13th and Adelaide 17th.

For the first time in at least two decades, Zurich topped the rankings, moving up four places compared to last year to overtake Tokyo which remained in 2nd place.

Geneva, the other Swiss city surveyed, moved up six places into joint third alongside Osaka.

Both Japan and Switzerland had seen strong currency movements in the past few years which had made them relatively more expensive, the EIU said.

As well as currency movement, structural factors maintained the high cost of living in many cities.

Despite Eurozone weaknesses affecting markets such as Greece, Ireland, Portugal, Spain and Italy, the evidence was that German and French cities were still relatively expensive with Paris and Frankfurt holding firm in the 10 most expensive - at sixth and tenth, respectively.

Oslo, which was considered the world's most expensive city a few years ago remained towards the top of the ranking - in fifth - although Singapore's presence, at ninth, in the top 10 highlighted a shift away from Western Europe towards Asian hubs.

Copyright © 2012, Television New Zealand Limited. Breaking and Daily News, Sport & Weather | TV ONE, TV2 | Ondemand

Read the original post:
NZ cities among most expensive for expats