Auckland and Wellington have emerged as two of the cheapest cities to live in the world, according to a global study of 214 centres.

The latest Cost of Living Survey from Mercer puts Auckland in 149th place and Wellington in 163rd place, beating all Australian cities surveyed in offering value for money.

The survey measures the comparative cost of more than 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.

It is used to help multinational companies and governments determine compensation allowance for their expatriate employees.

Auckland was placed 138th and Wellington 139th in 2009 but only 143 cities were measured in that study.

Topping the list of most expensive cities across five continents this year was Luanda in Angola, with Tokyo coming in at second place, followed by Ndjamena in Chad in third.

Karachi in Pakistan is ranked as the world's least expensive city in the survey.

It is the first time the ranking of the top 10 most expensive cities has featured three African urban centres.

Mercer senior researcher Nathalie Constantin-Metral said the results reflected the growing economic performance of the African region to global companies across all business sectors.

The top 10 also features three Asian cities Tokyo (2), Osaka (6) and Hong Kong (8=).

Moscow (4), Geneva (5) and Zurich (8 =) are the most expensive European cities, with Copenhagen rounding out the top 10.

Constantin-Metral said New Zealand and Australian cities remained cost competitive destinations for companies extending their business into the Asia-Pacific region and when compared to cities including Tokyo (2) and Osaka (6) and other major commercial hubs including Hong Kong (8), Singapore (11), and Beijing (16) - which ranked within the top 20 cities.

New Zealand was also ranked more affordable than Australian cities in the study, including Sydney (24) Melbourne (33), Brisbane (55), Perth (60) and Canberra (74). Adelaide (90) is the Australia's least expensive city.

The New Zealand and Australian dollar significantly strengthened against the US dollar as of February, making these cities more costly for expatriates coming from the US, the report said.

The currency movements reflected the stability of the Australian and New Zealand economies earlier this year, relative to the rest of the world, Mercer said.

Auckland was named as having the fourth-best quality of living, while Wellington was judged 12th worldwide in a separate survey produced by Mercer last month.

Costly cities

1. Luanda, Angola
2. Tokyo, Japan
3. Ndjamena, Chad
4. Moscow, Russia
5. Geneva, Switzerland
6. Osaka, Japan
7. Libreville, Gabon
8. Zurich, Switzerland
8= Hong Kong
9. Copenhagen, Denmark

Most affordable

205. Windhoek, Namibia
206. Tegucigalpa, Honduras
207. Kolkata/Calcutta, India
208. Addis Ababa, Ethiopia
209. Bishkek, Kyrgyztan
210. Ashkhabad, Turkmenistan
211. La Paz, Bolivia
212. Islamabad, Pakistan
212. Mangua, Nicaragua
214. Karachi, Pakistan