Tel Aviv bumped down to 16th most expensive city for overseas workers – survey

Tel Aviv has been ranked the 16th most expensive city for employees working abroad, moving down eight notches from last year, according to a worldwide annual survey of locations with the highest living costs released on Monday.

Mercer’s annual cost of living city ranking maps the most expensive to the least expensive cities for overseas employees. In this year’s survey, Dubai replaced Tel Aviv as the costliest city in the Middle East for international workers, ranked 15th on the global list, after moving up three places from 2023. UK’s capital London joined the top 10 most expensive cities and was ranked in 8th place, jumping from 17th, and taking the spot Tel Aviv held last year.

The ranking covered 226 cities across five continents and is based on comparative costs of over 200 items in each location — from housing and transportation to food, clothing, household goods, and entertainment. It is used as a tool for employers to calculate living allowances and compensation packages for overseas workers.

The cost of housing represents a major factor in Mercer’s cost of living city ranking. In Tel Aviv, rental prices dropped 22% in 2023 and up to March 2024, while in Dubai housing prices jumped 21%, according to the survey. Other cities that experienced declines in housing costs were Minsk, Manama, and Seoul. Many of the top 10 most expensive cities saw increases in housing costs, although they were more moderate, around 3% to 8%.

“Between 2023 and 2024, there was a lot of volatility in this cost around the world, with housing rental prices varying significantly between cities,” the report said. “Rising housing costs in many cities around the world have made it increasingly challenging for organizations to attract and retain top talent for international assignments.”

“As housing costs rise, organizations may need to allocate a larger portion of their budgets to provide competitive compensation packages that include housing allowances or subsidies,” the report said.

For Israelis, the cost of living rose sharply in 2022, as inflation accelerated above 5 percent and housing prices soared almost 20%. Since the start of last year and before the outbreak of the war in October, both inflation and housing prices started to slow down gradually.

Hong Kong has once again held its top spot as the most expensive city to live in for international workers, followed by Singapore in second place and Zurich in third place, according to Mercer’s ranking. Geneva and Basel rounded up the top five. Bern was the sixth most expensive city and New York City was ranked as the seventh most costly city for the relocation of employees.

Among the 10 least expensive cities were Havana, Durban, Tajikistan’s capital Dushanbe, Malawi’s Blantyre, Pakistan’s Karachi and Islamabad, and Nigeria’s Lagos and Abuja.