Limassol still the 2nd cheapest city in Europe
27/06/2006
www.financialmirror.com
But is it value for money?
The Cyprus seaside town of Limassol still ranks as the second cheapest city in Europe, according to the rankings of the latest Cost of Living Survey from Mercer Human Resource Consulting for 2006, but competes less well when it comes to desirable places to live.
This year Limassol was placed 118th out of 144 in terms of cost of living, with a score of 68.7 (New York = 100). In 2005 it was 100th out of 144, while in 2004 it was 95th.
However, in all three years Limassol was the second cheapest city in Europe (including Turkey).
Only one European city is cheaper than Limassol in the 2006 rankings, namely Leipzig in (former east) Germany.
In 2004 and 2005 the cheapest city in Europe was Romania’s capital Bucharest, which has now climbed past Limassol while Leipzig has dropped.
Cyprus’ capital Nicosia is not covered by the rankings.
As for the global rankings, this year Russia’s Moscow replaces Japan’s Tokyo as world’s most expensive city. South Korea’s Seoul is in second place, climbing three places since last year.
Tokyo moves down two positions in the rankings to take third place, followed by Hong Kong. Asuncion in Paraguay remains the least expensive city in the survey.
Mercer’s cost of living survey covers 144 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.
While not the only Cost of Living Survey around, Mercer says it is the world’s most comprehensive cost of living survey and is used to help multinational companies and governments determine compensation allowances for their expatriate employees.
Quality leaves something to be desired
Mercer Human Resource Consulting also produces quality indices, based on a range of factors that affect the quality of life of expatriates.
On this index, Limassol ranks 88th out of 215, with a score of 83.2, the same as in 2005.
Zurich ranks as the world’s top city for quality of living, marginally ahead of Geneva, which scores 108.1, while Vancouver follows in third place. Baghdad is the lowest ranking city in the survey, scoring just 14.5.
Although Limassol’s quality (88th), is therefore higher up the scale than its price (118th), one worry is that Limassol falls behind regional competitor Dubai, which is 85th out of 215.
Dubai is admittedly much more expensive according to the index (at 25th). But normally, when Cyprus is promoted over somewhere like Dubai to investors, promoters try to emphasise the quality of life aspects (like it’s not quite as hot and there are plenty of bars) as well as EU membership.
Cities in eastern and south-eastern Europe that beat Limassol by a small margin include Slovenia’s Ljubljana, Poland’s Warsaw and believe it or not Greece’s Athens. Many Cypriot shoppers report that Athens has improved on all counts since the Olympics, although the tax drivers have not changed.
Mercer’s quality study looks at 39 indicators, focusing on political stability, crime, currency regulations, banking services, limits on personal freedom, medical supplies and services, health hazards, schools, public services, restaurants and theatres etc, and availability of consumer goods, housing and the natural environment.
The impact of exchange rates
The moves in the global rankings this year have much to do with exchange rate fluctuations.
Anna Krotova, Senior Researcher at Mercer, said “The Euro has weakened against a number of currencies, for example the Canadian and US dollars, reducing the cost of living for expatriates in many European countries.”
Rebecca Powers, a Senior Consultant with Mercer’s international business, commented, “We have seen significant shifts in the cost of living rankings over the past few years, reflecting a changing global market. For many companies it can now be more expensive to send employees to work in Russia or Korea than places like Japan or Switzerland which are often perceived to be more costly.”
Fiona Mullen
