A rise in global nationalism paired with a worldwide drop in oil prices has brought about significant shifts in the global economy over the past year. As a result of these developments, certain destinations that have long been some of the world’s most expensive have recently seen a decrease in their cost of living.
Whether due to international politics, export and import changes or currency swings, cities like London – which recently voted to depart the EU in the Brexit vote – have seen their ranking dramatically drop in the Economist Intelligence Unit’s annual Cost of Living Index. And, since local currency values have fallen against foreign currencies in most cases (and the rate of local inflation often rises sharply), it’s expats employed by foreign companies that are likely to see the most benefit in these cost-of-living changes.
We talked to residents and expats living in these places to find out how the changes have affected them, and how to save the most money in these suddenly affordable destinations.
Post-Brexit London saw a drop on the Economist Intelligence Unit’s cost-of-living index (Credit: Vladimir Zakharov/Getty Images)
London
The 2016 Brexit vote in favour of Britain leaving the European Union had an immediate negative impact on the pound as compared to other currencies. So much so that London, long at the top of the cost-of-living index, dropped 18 places in just a year. International tourists have flocked to the country to snag deals on luxury goods and other shopping; one estimate said foreign spending has surged more than 36% year-on-year.
But since foreign currencies are stronger against the pound, the cost of imported goods have gone up in price, said Ian Wright, founder of international mover company MoverDB.com, adding that “or more sneakily, the size has been reduced”. (Though the company denies a Brexit association, Toblerone changed the shape of their chocolate bars shortly after the vote). Experts predict that important imports like fruits and vegetables will also likely rise around 8% as a result of Brexit.
Still there are plenty of ways to live even more affordably – and finding good deals on housing is top of the list. Generally, living in south and east London is cheaper than the west or north.
“London is really quite strange in that you can have council estates located right next to multi-million pound homes,” said Wright, originally from Canada.
London's Abbey Wood neighbourhood is home to the ruins of the 12th-Century Lesnes Abbey (Credit: Ray Wise/Getty Images)
Wright lives in Abbey Wood in southeast London, where he says a house can be rented from around £1,000 a month, or purchased for around £325,000. “While the area doesn't have a lot going on today, the ruins of the 12th-Century Lesnes Abbey and many parks and woods nearby can be wandered and enjoyed for free,” he said. Other affordable options include more centrally located Leyton near Olympic Park in east London, and East Ham just south of Leyton. East Croydon in south London is also being extensively redeveloped and will soon have a new shopping centre – but you can still find a rental from just £500 per month.
While the UK in general has taken on something of an anti-immigrant mood, according to Wright, he assures that the capital is still very open and multicultural. “London has far fewer ethnic enclaves than cities in the US so you get expats and immigrants from all over the world living next to each other, which I think is one of the best things about the city,” he said.
Beijing
Many Chinese cities dropped more than 10 places in this year’s rankings, including Beijing which dropped 16 places. While the report didn’t speculate on causes, sources have attributed the drop to falling demand for Chinese exports and a decreased value of the yuan against the dollar.
Affordable rooms can be found in Beijing’s trendy Sanlitun district (Credit: Andy Brandl/Getty Images)
Much like in London, being able to live comfortably depends on how far from the city centre you’re willing to live: a one-bedroom in Tongzhou, 22km east of the city centre, rents for only RMB 2,500 per month. “But your best bet as a foreigner is finding a room a bit closer to the centre for around RMB 4,000, which you can pretty much do in the ‘cool’ parts of town near Sanlitun [9km northeast from the centre] and Gulou [5km north of the centre],” said Om Buffalo, an American who currently lives in Beijing. In general, south and west Beijing are cheaper than the north and east.
Other ways to save money include taking the subway instead of taxis. “For medium to long-distance trips, taking a taxi in Beijing often takes longer and costs way more than the subway,” said Josh Ong, director of global marketing and communications at Beijing-based Cheetah Mobile. “It's a little daunting at first, especially during rush hour, but with a little research, you can learn your way around.”
His other suggestion is to eat like a local, using dianping.com to find the places real Beijingers are dining. “Western food in Beijing comes at a premium, but there are amazing noodle shops and dumpling houses just around the corner from you.”
Eat like a local using dianping.com to find noodle shops and dumpling houses (Credit: Diane Levit Design Pics/Getty Images)
Lagos
Nigeria’s capital also dropped 16 spots in the rankings, due to global dropping oil prices, one of the country’s primary exports. This may be helpful for foreign employees, but Hashim Zein, an ambassador for expat community InterNations and originally from the US, says that this may create additional security challenges as the related currency inflation has driven prices up for locals, which can lead to an increase in theft and related crimes.
A little common sense goes a long way, however, say locals, and it shouldn’t stop anyone from living here. “I feel at home in Nigeria because of the attitude of the people here. A can-do spirit and resilience plus always time to make merry no matter what,” Zein said. Plus, the city knows how to have a good time. “There’s no party like a Lagos party – seven days a week!”
Locals embrace a can-do spirit and resilience in Nigeria’s largest city (Credit: Andrew Holt/Getty Images)
Lagos is separated into two major parts – the Mainland and Island (which is actually multiple islands, but is separated from the mainland by the Lagos Lagoon). Most expats live on the Island part, including the affluent Victoria Island neighbourhood, 17km south of the city centre and part of the larger Lekki peninsula; or equally high-end Ikoyi, an island neighbourhood, located 15km south of the city centre, built for British expats during colonial rule. Nearby Lekki Phase, a brand-new city still in development, is also just a few more kilometres further down the island.
Those who work in manufacturing are more likely to need to be on the mainland, and Ilupeju (8km north of the centre) and Ikeja (15km north) are some of the best areas for expats, according to Zein, for their safety, more stable infrastructure and location close to many businesses.
Mexico City
Ranked 82 of 132 cities in 2017, Mexico City has always been relatively affordable – but also dropped nine places in the rankings this year. As the currency becomes weaker compared to foreign currency, inflation has risen and local prices have gone up slightly, including recently increased bus fares due to the gasolinazo, the higher gas prices that have been the source of city-wide protests.
For that reason, it’s better to walk to the metro than take the bus, said Lauren Cocking, originally from London who writes a Mexico travel blog. And while she relies on public transportation over private transportation, she recommends Uber for late-night needs. “It is often cheaper than taxis and far safer than public transport, especially late at night.”