Top 10 most expensive cities for expats in 2025

For expatriates, the most expensive cities are largely concentrated in North America and Western Europe, with Singapore and Hong Kong standing out as notable exceptions.

As global inflation is expected to ease in 2025, cost-of-living rankings are expected to remain relatively stable, but disparities are anticipated to persist.

A study by the Lee Kuan Yew School of Public Policy Asia Competitiveness Institute, titled Forecasting 2025 Cost of Living Indices for Expatriates revealed that, the priciest cities continue to cluster in North America and Western Europe, with Singapore and Hong Kong as notable exceptions in Asia.

In contrast, the most affordable options are largely in Southeast Asia.

Here are the key findings from the report:

*Note: Cities are arranged in descending order of the latest ranking result.

Top and bottom 10 cities in cost-of-living for expatriates

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Bottom

According to the report, nine out of the 10 most expensive cities for expatriates among the 45 major cities remain the same between 2024 and 2025, with only minor changes in ranking.

Similarly, the ten least expensive cities for expatriates remain unchanged across the two years. Most cities experienced minimal changes in ranking, except for Manila and Jakarta.

Top and bottom 10 cities in cost-of-living for ordinary residents 

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For ordinary residents, most cities retain their rankings with minor fluctuations. Overall, the list remains dominated by U.S. cities, which account for seven of the ten most expensive locations.

Lastly, the list of the bottom 10 cities in 2025 is identical to that in 2024. Hanoi and Ho Chi Minh have become relatively more expensive compared to other cities in this group.

The results from the report indicate that cities in developed regions generally have a higher cost of living compared to those in developing regions, and are becoming increasingly unaffordable. More importantly, the cases of higher-ranking cities – Zurich, Singapore, and Hong Kong – indicate that factors such as housing markets, transportation costs, education fees, and persistent inflationary pressures, contribute to elevated living costs.

Specifically, the costs of housing rank the highest in most of the top ten most expensive cities. Meanwhile, goods in transportation and education are the most expensive for expatriates in Singapore, while they rank fifth and sixth in Hong Kong, respectively.

A key driver of housing costs is the imbalance between housing supply and demand, which is particularly challenging in cities with high population inflows or are constrained by limited land available for development. Additionally, rising construction costs and land prices further elevate housing prices.

For expatriates, the burden is greater, as they primarily rely on the private rental and condominium market, where prices are substantially higher compared to the public rental or subsidised housing available to residents. Similarly, transportation costs mainly come from private car ownership. Expatriate consumption patterns typically assume a preference for owning or leasing cars.

Lastly, exchange-rate fluctuations directly affect the pay and savings of internationally mobile employees. Strong exchange rates like Singapore and the Euro area contribute to higher rankings relative to other cities with weaker exchange rates such as China, Japan, and India.

However, stronger currencies do not raise the cost of living for ordinary residents who earn in local currencies. On the contrary, currency appreciation helps dampen imported inflation by reducing the local-currency prices of imports, thereby easing consumer prices.

To summarise, the results reveled three main insights:

1. Relative rankings are generally stable over time, with cities in developed economies consistently occupying the top tier.
2. For expatriates, housing markets, transportation costs, and international school fees emerge as the most decisive drivers of cost pressures, amplified by currency fluctuations.
3. For ordinary residents, regional disparities are more pronounced: residents in developed regions continue to face substantially higher living costs.

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