Spiralling accommodation costs have made Dublin the most expensive place in the euro zone to live, costlier than Paris, Berlin and Rome, according a new survey published on Tuesday.
The Irish capital was ranked 46th globally in an annual cost of living study of cities by pay and pensions specialist Mercer, but sixth in Europe behind Zurich, Bern, Geneva, London and Copenhagen.
However, in terms of the euro area, Dublin was found to be the most expensive, primarily because of high rents, which are now on average over €2,000 a month in the capital.
“As with recent years, one of the major factors influencing Dublin’s ranking is the cost of rental accommodation,” Noel O’Connor, senior consultant at Mercer’s Irish operation, said.
“Rental accommodation is often the biggest cost for companies when placing an employee on assignment,” he said.
Nonetheless Mr O’Connor said Dublin remains an attractive location for expatriates when they elect to go on assignment.
“As Brexit progresses, organisations with EU headquarters in the UK may need to look for alternative EU locations, and Dublin is likely to be on the shortlist of preferred options,” he said.
Concern is growing that housing shortages and rising prices particularly in urban areas may eventually hinder inward investment.
The cost of living survey, carried out in March, uses New York as its base city, ranking all other cities against the it in terms of cost of living expenses.
This year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.
Hong Kong again topped the list of most expensive cities for expatriates, followed by Ashgabat, Turkmenistan in second position, Mercer said. Tokyo and Zurich remain in third and fourth positions, respectively, whereas Singapore is in fifth, down two places from last year. New York City ranked sixth, moving up from ninth place.
Other cities appearing in the top 10 of Mercer's costliest cities for expatriates are Shanghai (7), Bern (8), Geneva (9), and Beijing (10). The world's least expensive cities for expatriates, according to Mercer's survey, are Tunis (209), Windhoek (208), Tashkent and Bishkek, which tied to rank 206.
Mercer said the social and economic disruption caused by the Covid-19 pandemic has “spurred organisations” to reassess their global mobility programmes with a focus on the well-being of their expatriate employees.
“The challenging circumstances associated with the Covid-19 pandemic mean that, now more than ever, organisations need to support their expatriate workforces,” Mr O’Connor said.
Despite an appetite to grow and scale globally while navigating the uncharted waters of a health and economic crisis, reductions in staff and salaries as well as changes to benefit programmes have challenged overseas expansion strategies, he said.
In 2020, many euro-zone cities fell in the rankings due to the strength of the dollar against the euro.