LOS ANGELES - The Economist Intelligence Unit (EIU) just published this year’s Worldwide Cost of Living index, unveiling the world’s most expensive cities to live in in 2021 — and two U.S. cities made the top 10.
New York City came in at number six and Los Angeles at number nine. The EIU report says that U.S. cities did not make the top five due to the government’s response to the pandemic, injecting money into the economy devaluing the U.S. dollar.
Meanwhile, the Israeli city of Tel Aviv became the world’s most expensive city to live in, surpassing last year’s most costly city, Paris.
Every year, the EIU tracks the cost of living across nearly 200 cities around the globe comparing the price of everyday goods and services.
Upasana Dutt, head of Worldwide Cost of Living at EIU, noted that while many cities have begun to recover from the COVID-19 pandemic that is still ongoing amid vaccine efforts, global supply chain bottlenecks are contributing to higher cost of living everywhere.
"Although most economies across the world are now recovering as Covid-19 vaccines are rolled out, many major cities are still seeing spikes in cases, leading to social restrictions. These have disrupted the supply of goods, leading to shortages and higher prices," Dutt said in a statement.
U.S. inflation has seen record highs as the country’s consumer prices rose 0.4% in September from August as the costs of new cars, food, gas, and restaurant meals all jumped.
Price hikes across the country in September sent inflation up 5.4% from where it was a year ago, matching the largest increase since 2008 as tangled global supply lines continue to create havoc.
Overall, cities across the U.S. are becoming increasingly more expensive.
Average rent prices across the U.S. have already begun to return to pre-pandemic levels and are steadily increasing, according to reports from several home-search websites.
According to Dwellsy, a self-described rental housing platform, rents have increased by 9.6% nationwide in 2021 to an average of $1,649 per month.
RENTCafé reported that "renting activity is back to pre-pandemic levels — up 13% in the first half of 2021 compared to the same time last year."
Apartmentlist.com reported that the national median rent has increased by 11.4% so far this year compared with just 3.3% for the first six months of 2017, 2018, and 2019.
"Every one of the nation’s 100 largest metro areas has seen month-over-month rent growth over the last five months," said Christopher Salviati, economist for the website.
Freddie Mac projects U.S. apartment rents will rise 2.5% this year, while the vacancy rate slips to 5%. The forecast is based on the assumption that growth in the economy will continue through the rest of the year and into 2022.
Here are the top ten most expensive cities to live in in 2021.
1. Tel Aviv, Israel
2. (tie) Paris, France
2. (tie) Singapore
4. Zurich, Switzerland
5. Hong Kong
6. New York City, New York
7. Geneva, Switzerland
8. Copenhagen, Denmark
9. Los Angeles, California
10. Osaka, Japan
The Associated Press contributed to this story.