Dollar dive makes Auckland far cheaper

By | March 11, 2009

11 March 2009

Source: NZ Herald

4:00AM Wednesday Mar 11, 2009
By David Eames

It may not feel like it to recession-hit residents, but Auckland is becoming a cheaper city in which to live, according to a new international survey.

The Economist Magazine Worldwide Cost of Living Survey shows Auckland plummeted 29 places in the past five months, to claim 78th spot on the list of the world’s most expensive cities.

Wellington came in just behind at 80th-equal – down from its previous 55th spot, and tied with the Chinese city of Qingdao.

The latest figures were calculated by readjusting September cost of living results using February exchange rates – the weaker a currency, the lower a city’s ranking.

The New Zealand dollar, which was buying US66.8c on September 10, was yesterday afternoon buying just US49.5c – translating to big falls.

Across the Tasman, a weaker Australian dollar saw Sydney tumble from 17th to 35th most expensive city, while Melbourne fell from number 24 to number 39 in the rankings.

The cost of living survey compares prices and products in 140 cities, with the results providing guidelines for companies calculating allowances for staff and their families moving overseas.

While living costs appear to be getting cheaper across Australasia, residents in countries with comparatively strong currencies are looking at big cost increases. A resurgent greenback has seen the cost of living in American cities skyrocket, with Chicago, New York and Los Angeles all climbing from 39th to 23rd-equal on the list.

The cost of living in those cities is 28 per cent higher than in Auckland, the survey shows.

The list sees Tokyo and Osaka top the charts, claiming first and second place respectively.

The cost of living in both cities is more than twice that of Auckland.

Karachi, in Pakistan, came dead last in 132nd place, while Tehran, Mumbai, New Delhi and Kathmandu rounded out the bottom five. The cost of living in all five cities was less than half that of New York, the city against which the survey was indexed.

Shanghai, Hong Kong and Singapore joined Tokyo and Osaka in the top 30.

European centres have traditionally filled the top 10, and did so again, occupying all the spots from Geneva at nine, to Paris at three. Oslo, in Norway, lost its previous number one spot, falling to fifth place.

London was the only major European city to experience a big fall, with a weak pound blamed for the city’s drop from number eight to number 27.

Survey editor John Copestake said the cost of living was usually driven by two factors: local prices and exchange rates.

While the normal cost of living figures were “relatively stable”, the global financial crisis had created exchange rate fluctuations that had “significantly altered our assessment of the most and least expensive cities,” Mr Copestake said.

CITY LIVING

Brackets show Sept. 2008 rankings.
1 (6)Tokyo – pop: 28,025,000
2 (8)Osaka – pop: 10,609,000
3 (2)Paris – pop: 9,638,000
11 (28)Hong Kong – pop: 6,097,000
27 (8)London – pop: 7,640,000
35 (17)Sydney – pop: 3,665,000
78 (49)Auckland – pop: 1,400,000
80 (55)Wellington – pop: 410,320
131 (131)Tehran – pop: 7,380,000
132 (132)Karachi – pop: 11,774,000
Source: Economist / Worldatlas.com