Lisbon is the 100th most expensive city in the world for foreigners

The cost of living in Portugal has been worsening not only due to inflation but also because of rising house prices (although this has slowed down in recent months). As a result, Lisbon has become the 100th most expensive city in the world for foreigners in 2024, climbing 17 places in this global ranking compared to the previous year. In Europe, Lisbon is the 39th most expensive city.

This information comes from the consultancy firm Mercer, which has just released its "Cost of Living" ranking for 2024. This ranking, as the name suggests, compares the cost of living for expats in 226 cities worldwide, analysing the comparative prices of over 200 categories such as transportation, food, housing, and leisure activities, among others.

According to the 2024 edition of the "Cost of Living" ranking, published on Monday 17th June, Lisbon is the 100th most expensive city in the world for expatriates, having risen 17 positions compared to the previous year. This indicates “an increase in the cost of living for those who decide to come and work in the Portuguese capital,” the report explains. In the European context, Lisbon occupies the 39th position.

"Companies may reconsider the compensation associated with mobility, possibly including or increasing housing support," says Tiago Borges, Career Business Leader at Mercer Portugal.

“The challenges of the cost of living significantly impact the mobility of multinational companies and their employees,” says Tiago Borges, Career Business Leader at Mercer Portugal. He believes that, therefore, “it is important for organisations to stay aware of trends and take employee feedback into account so they can effectively manage the impact of these issues,” he stated in the document.

“The increase in the cost of living leads employees to rethink routines and reduce expenses, potentially requiring extra effort to meet their basic needs,” he adds. “Given these challenges, companies may reconsider the compensation associated with mobility, possibly including or increasing housing support, providing support services, or exploring alternative strategies for attracting and retaining talent.”

The rising cost of housing in various cities has made mobility a challenge for organisations. Inflation is another factor reducing purchasing power and putting pressure on compensation policies. “This situation is likely to make it harder to attract and retain key talent, potentially increasing the costs of benefits and salaries, as well as operational costs, creating limitations on employee mobility,” the consultancy firm warns.

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What are most expensive cities to live in Europe and the world?

The same ranking reveals that Hong Kong once again occupies the top position, making it the most expensive city in the world for expats. In second place is Singapore. The high cost of housing is the main factor explaining why these two Asian cities top the list. “These major economic centres also attract a large number of expatriate workers, which contributes to the increased cost of goods,” Mercer further explains.

The top five most expensive cities for expatriates globally is completed by three Swiss cities: Zurich, Geneva, and Basel. “Switzerland’s high cost of living may be correlated with its superior quality of life,” they note. Bern, another Swiss city, is in 6th place on the list.

In the European context, besides the four Swiss cities that top the ranking, the most expensive cities are London (8th position), Copenhagen (11th position), Vienna (24th position), Paris (29th position), and Amsterdam (30th position).

On the other hand, Minsk, the capital of Belarus, is the cheapest European city, occupying the 212th position. Other low-cost cities in Europe include Sarajevo (203rd position), Skopje (198th position), Kraków (175th position), and Wrocław (169th position).

“Although the European economy has slowed down, there are already positive signs of growth in most European Union member states. In Southern Europe, economic expansion is faster, with annual inflation expected to decrease, indicating greater price stability,” the document reads.

All North American cities are ranked in the top 100 positions in the "Cost of Living" ranking for 2024, with seven cities in the top 20. Two of them are New York and Los Angeles (USA), occupying the seventh and tenth positions, respectively.