Paris and Zurich have joined Hong Kong in becoming the three most expensive cities in the world, according to the latest Cost of Living Index from the Economist Intelligence Unit (EIU).
The index compared the prices of 138 goods and services from some 130 cities in September 2020 and found that prices on average grew 0.3 per cent over the past year.
The European cities have leapfrogged over Singapore and Osaka, which tied with Hong Kong in the previous survey conducted in March.
The changes are due to the COVID-19 pandemic, which has seen prices fluctuate around the world.
Currency fluctuations due to the pandemic means destinations in Africa, the Americans and Eastern Europe became less expensive since March, while Western Europe, where the Euro has risen in value against the US dollar have seen price rises.
A mass exodus of foreign workers has seen Singapore fall to fourth in world rankings, while Osaka has fallen with Tel Aviv now tying for fifth place.
Geneva, New York City, Copenhagen and Los Angeles round out the top 10.
Sydney is now the 15th most expensive city, while London ranked 20th in the world.
Largest cost of living rises
While Paris and Zurich are the most expensive cities in the world, the biggest cost-of-living increases were in Tehran and Perth.
The index showed the cost-of-living in Perth increased compared with other major cities as the Western Australian capital climbed 12 places to 67th most expensive city in the world.
Only Tehran made a bigger leap up the ladder – climbing 27 rungs to 79th place due to the reduced supply of goods (and subsequent price increases) caused by US sanctions.
Costly cigarettes, cheap clothes
While the prices of packaged goods, such as coffee, cheese, rice and orange juice, rose across most cities in the latest worldwide cost of living survey, the average index for the food and grocery category remained flat.
Logistical challenges also affected prices, with shortages of goods such as toilet roll and pasta fuelling price rises in some categories.
Of the 10 categories covered by the report, tobacco and recreation saw the biggest price increases, while clothing prices have seen the steepest decline.
The mean index for tobacco reported the highest year-on-year increase for any non-durable goods.
All five Australian cities saw double-digit increases in the tobacco index.
