Moscow Surpasses Tokyo as Priciest City

Moscow has eclipsed Tokyo as the world’s most expensive city, according to a new survey.

The Russian capital moved up three spots since a year ago thanks to a recent property boom, the survey released today showed, while the Japanese capital slipped to third place, following the sliding value of the yen.

South Korea’s Seoul ranked second on the list, up from fifth last year.

The survey by Mercer Human Resource Consulting ranked 144 cities around the world, measuring the comparative cost of more than 200 items such as housing, transportation and food. The survey is aimed at helping multinational employers determine employee compensation.

With cities around the world getting increasingly expensive -- notably in developing countries -- employers may need to reexamine the way they provide compensation and benefits for their workers, said Rebecca Powers of Mercer.

“As we see more and more movement into these emerging markets, a lot of those programs need to be looked at,” Powers said.

Currency exchange-rate fluctuations were behind the majority of the changes in ranking, but in Moscow’s case costs were buoyed by surging prices for large homes. Prices for big houses rose 50% over the last year, driven in part by soaring demand from foreigners moving to Russia, Powers said.

After Moscow, Europe’s priciest cities were London, ranked No. 5, and Geneva, ranked seventh. European cities fell because of the weakening euro.

New York -- ranked No. 10, up three spots from last year -- remains North America’s costliest city, followed by Los Angeles at No. 29, San Francisco at No. 34 and Chicago at No. 38.

Chinese cities -- including Hong Kong at No. 4, Beijing at No. 14 and Shanghai at No. 20 -- climbed the list mostly as an effect of the yuan’s strength after it was unpegged from the dollar.

The least-expensive city surveyed was Asuncion in Paraguay.