1. Moscow, Russia

Less than two decades after the fall of communism, Moscow has taken well to capitalism, earning the title of world's most expensive city for the third year in a row. Home to more billionaires (74 and counting) than any other metropolis, Russia's capital is 42% more expensive than New York, the most expensive city in the U.S.


2. Tokyo, Japan

Japan's economy is stagnating, but Tokyo is as expensive as ever. For American travelers, the city's real estate prices are the highest in the world--a two-bedroom luxury apartment costs over $5,100 per month, about $600 more than a comparable pad in Moscow or New York.

3. London, U.K.

Founded by the Romans nearly 2,000 years ago, London is an ancient stalwart when it comes to pricey cities. Though it slipped from last year's No. 2 spot, it remains extremely expensive--even a ride on one of the city's vaunted double-decker buses costs $5.89.


4. Oslo, Norway

The Norwegian capital jumped up from No. 10 last year, thanks to an infusion of wealth spurred by the country's booming oil industry. With a population of 850,000, Oslo has plenty of room to grow.

5. Seoul, South Korea
Just 40 miles from the North Korean border, Seoul continues to flourish despite the specter of conflict. South Korea's capital is the most expensive city in Asia outside of Japan, edging Hong Kong by less than one percentage point.


6. Hong Kong, China

Eleven years ago, this glittering metropolis returned to Chinese control after more than a century in British hands. Communist oversight hasn't made the city cheap enough for the masses: Hong Kong is nearly 20% more expensive than New York.

7. Copenhagen, Denmark
Denmark's capital takes its name from the Danish words meaning "merchant's harbor," and the city still lives up to its mercantile moniker: It's the third-most expensive city in Europe.

8. Geneva, Switzerland
The unofficial capital of watchmaking, Geneva is a pricey locale even if you aren't going there to shop for a Patek Philippe. Geneva's cost-of-living index is almost 50% higher than Chicago or San Francisco.


9. Zurich, Switzerland
Founded in Roman times as a tax-collecting and trading post, Zurich remains a vital cog of the world economy. Slightly cheaper than nearby Geneva, Zurich is still a pricey destination for Americans, thanks to the Swiss Franc's 15% appreciation against the dollar over the past year.

10. Milan, Italy
Milan rounds out the top 10 most expensive cities in the world. The city's Via Montenapoleone rivals New York's Fifth Avenue and Paris' Champs Elysees as an international shopping destination--and, at least for Americans, it's pricier than both.

11. Osaka, Japan
In addition to being Japan's culinary capital, Osaka is the fourth most expensive city in all of Asia. Its population of 17 million makes it the ninth-largest metro area in the world; Osaka is also home to a host of multinational corporations, including Mitsubishi and Sanyo.

12. Paris, France
Paris may be the world's unofficial capital of romance, but love comes with a price for American visitors. Even a Royale with cheese will cost you: The average fast-food burger costs $8.61, about 50% more than a comparable meal in New York.

13. Singapore, Singapore
Notorious for draconian littering policies, Singaporean authorities have been known to submit gum-spitting foreigners to public floggings. American tourists and expats can find punishment enough in the city's cost of living, more than 25% higher than that of Los Angeles.

14. Tel Aviv, Israel
Israel has more billionaires per capita than any country in the world, so it should come as no surprise that its commercial center is the most expensive destination in the Middle East. Tel Aviv, which means "spring hill" in Hebrew, grew out of the ancient trading post of Jaffa and now boasts a metro-area population over 3 million.

15. Sydney, Australia
Sydney has come a long way from its early days as a convict settlement. Today it is the largest and most expensive city on the Australian continent, home to world cultural landmarks like the Sydney Opera House. A ride on mass transit costs $2.41 per ride, 20% more than the price in New York.


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In 1998, Moscow was in crisis. More than 100,000 Russians took to the streets as a slew of banks--and the life savings of millions of citizens--went bust.

But just a decade later, the global commodities boom has made Russia flush with cash, and Moscow has become a pricey place to live.

That's the finding in Mercer's 2008 Worldwide Cost of Living Survey. Moscow tops the list with a score of 142.4, up 6% from last year--and 42% higher than New York, the most expensive city in the U.S. The Russian capital is followed by Tokyo; London; Oslo, Norway; and Seoul, South Korea.

New York fell from No. 15 to No. 22, thanks to the dollar's protracted woes. Los Angeles is the second-priciest city in the U.S., but Hollywood's denizens can't cry poverty just yet:
At No. 55, Los Angeles is cheaper than the best neighborhoods of Lagos, Nigeria (No. 30); Almaty, Kazakhstan (No. 44); and Zagreb, Croatia (No. 49).


"The decline in the ranking of all U.S. cities is due to the weakening value of the U.S. dollar against most major world currencies," says Mercer's Mitch Barnes, a principal at the firm. "The dollar has been declining steadily for the past several years, which has resulted in an overall decrease in the cost of living in 19 U.S. cities, relative to other major global cities studied."

Behind The Numbers
Mercer surveyed 253 cities across six continents and measured the relative cost of over 200 items in each place, including housing, transport, food, clothing, household goods and entertainment. The survey is used to help American government agencies and multinational companies determine living costs for their expatriate employees, who usually demand a relatively high quality of life.

"Companies may assign high priority to expansion in these economies, but may have to deal with inflationary pressures due to competition for expatriate-level housing," says Yvonne Traber, a research manager at Mercer.

In the wake of the Federal Reserve's bailout of mortgage lenders Fannie Mae and Freddie Mac, the dollar has continued its slide, falling to a record low against the euro earlier this week. While that's bad news for Americans traveling abroad, it could mean that more international businesses will set up shop in the U.S., where posh cities are suddenly becoming much more affordable.

"The U.S. dollar's loss of value may serve to attract globally mobile executives to business centers such as New York, Chicago and Los Angeles," says Barnes. "The difference in cost of living can be significant, particularly for those executives with families."

Most Expensive Meccas
As for Moscow, prices in the Russian capital show no signs of dropping. The global commodity boom continues to fatten the pockets of local tycoons, and the ruble has appreciated 8% against the dollar since January.

What costs most where you live? Weigh in.

Moscow is home to 74 billionaires, the most of any city in the world. Its three wealthiest citizens ( Oleg Deripaska, Vladimir Lisin and Roman Abramovich) each possess fortunes in excess of $25 billion. And Russia's super-wealthy are just getting started: 13 of the country's billionaires are under the age of 40.

Founded by the Romans nearly 2,000 years ago, No. 3 London is an ancient stalwart when it comes to pricey cities. Though it slipped from last year's No. 2 spot, it remains extremely expensive--even a ride on one of the city's vaunted double-decker buses costs $5.89.

And while Japan's economy is stagnating, Tokyo is as expensive as ever. For American travelers, the city's real estate prices are the highest in the world--a two-bedroom luxury apartment costs over $5,100 per month, about $600 more than a comparable pad in Moscow or New York.