Costs up for NZ city life, but still cheaper than Oz

Fog over Auckland City viewed from Mt Victoria, Devonport. Photo / Brett Phibbs

Auckland and Wellington have become more expensive places to live in the past year - but are still cheaper than Australia's big cities.

According to the latest Mercer Worldwide Cost of Living Survey Auckland is ranked 118 - roughly in the middle of 214 cities that have measured for the comparative cost of over 200 items including housing, transport, food, clothing, household goods and entertainment.

Wellington has been ranked as being slightly cheaper at 136.

Both New Zealand cities have become more expensive to live in since last year's survey when Auckland was ranked 149 and Wellington was 163.

However, the good news is New Zealand is still considered to be amongst the most affordable and appealing cities in Asia Pacific. It's also still cheaper than than cities like Sydney, which was ranked the 14th most expensive and Melbourne which was 21.

The survey is designed to help multinational companies and governments determine compensation allowances for their expatriate employees.

Sarah Barnaby, Senior Associate in Mercer's information product solutions business in New Zealand, said rising costs, due to currency fluctuations and natural disasters have presented challenges for multi-national organisations managing workforces in New Zealand.

But, she said that didn't diminish the appeal of New Zealand in the eyes of expatriates or their employers.

"Despite a rise in the cost of living, New Zealand remains a highly competitive location for international employers with rankings far below those of other cities in Asia Pacific.

"Additionally, multi-national organisations are more than likely to absorb any short-term increases associated with relocating staff to New Zealand."

Ms Barnaby said organisations managing an international workforce should not view costs associated with currency fluctuations in isolation but factor it into the longer-term growth plan for the business.

Luanda in Angola kept its title as the most expensive city, while Tokyo was the second most expensive. Moscow, ranked at number four, was the most expensive European city.

The cheapest city was Karachi in Pakistan for the second year in a row.

Auckland Mayor Len Brown said people were aware that Auckland could be an expensive place to live.

"That's why the council is focused on keeping rates affordable and fixing up the transport system so people don't have to spend as much of their income getting around."

He said the city had a good balance of affordable living compared to other countries, along with a strong economy, great lifestyle, interesting arts and culture, diverse communities and an attractive healthy environment - but the there was work to be done to build on those attributes in order to create "an even more liveable city."

The most expensive cities:
Rank City Country
1 Luanda, Angola
2 Tokyo, Japan
14 Sydney, Australia
18 London, United Kingdom
21 Melbourne, Australia
27 Paris, France
77 Los Angeles, USA
118 Auckland, New Zealand
136 Wellington, New Zealand
214 Karachi, Pakistan