Darmstadt, New York and Co. - these are the most expensive cities in the world

Caleb Simpson is feared on the streets of New York. For his videos on the TikTok platform, he asks inexperienced city dwellers how much their monthly rent is in the metropolis. The answers are intended to shock viewers: 1875 dollars says a young student, 2300 dollars an older lady, 5900 dollars the entrepreneur. And the ancillary costs are usually not included.

Compared to the rest of the world, residents of New York have to dig deep into their pockets to live in New York. A current survey by the financial service provider Smartasset has shown how low. The takeaway: Earning $100,000 feels like making just $36,000. In no other US metropolis can you do so little with your salary as in New York.

For comparison: In Memphis, the 100,000 dollars go the furthest, they are still worth 86,444 dollars after adjustment for purchasing power. For the survey, Smartasset compared the average after-tax income in the 76 largest US cities and adjusted the result for the cost of living in each location.

"A six-figure salary is considered a sign of success and financial comfort and has long been an important milestone for American workers," says Smartasset manager Patrick Villanova. But times have changed and $100,000 isn't what it used to be.

"Especially as rampant inflation continues to weaken the purchasing power of money and drive up the cost of living," says Villanova, citing a recent survey. According to this, even 51 percent of people with more than $100,000 a year said they had to live from paycheck to paycheck. Last year it was 44 percent.

Less bang for your buck? This may be particularly true in some cities. At the same time, however, there is also a general trend. The Economist Intelligence Unit (EIU) regularly surveys the cost of living in a global comparison - and recently noticed a real price shock in all cities.

According to this, prices in 172 major cities surveyed increased by an average of 8.1 percent year-on-year. "The war in Ukraine, Western sanctions against Russia and China's zero-Covid policy have created supply chain problems that, together with rising interest rates and exchange rate shifts, have led to a global cost-of-living crisis," explains EIU department head Upasana Dutt.

The average price increase in the 172 cities was the strongest that the researchers have seen in the past 20 years - and thus since the beginning of the data series.

According to the survey, the strongest price increases were for petrol, which rose by an average of 22 percent in the respective local currency. The prices for electricity, food and household goods also rose rapidly. In contrast, the price developments for leisure articles and services were restrained.

The economic experts have published their updated economic forecast for the current and the coming year. In it, they discuss their view of the economic situation - especially against the background of inflation.

Source: WELT/Dietmar Deffner

The reason may be that consumers are concentrating on essential purchases in the wake of increased costs. Expert Dutt is optimistic for the current year: "We assume that prices will fall as the supply bottlenecks gradually ease and the economy slows down at the same time."

In addition to companies like Smartasset and institutes like EIU, others regularly calculate the cost of living – i.e. the price for maintenance and rent, but without including local salaries. If you believe the Numbeo platform, there are cities where life is even less affordable than in New York. According to the latest evaluation from the beginning of the year, the world capital is only the third most expensive city in the world.

Only a few are likely to have the front runner on the list: Hamilton in Bermuda is the city with the highest cost of living in the world. With just 1000 inhabitants, Hamilton is one of the smallest capital cities in the world. But its status as a tourist destination and tax haven has pushed up local costs.

The prices for purchase and rent here are said to be around 18 percent higher than in New York. Santa Barbara in California follows in second place. However, the domicile of the rich and beautiful in the vicinity of the metropolis of Los Angeles is only just ahead of New York. According to Numbeo, it is the world's largest collection of price data for more than 570 cities.

The most expensive German city is only in 66th place in the global ranking: According to the platform, Munich currently has the highest costs for purchase and rent. However, the cost of living in the Bavarian state capital is just 60 percent of the level in New York. The second most expensive German city, on the other hand, should come as a surprise: Darmstadt.

The average costs in the southern Hessian city correspond to around 55 percent of the New York level. A single here has average monthly expenses of 1029 euros – not including rent. For an apartment in the city center there is another 975 euros on average. Above all, students and the high wages in the local IT sector drive up the prices. Only then will Berlin, Frankfurt and Hamburg follow.

And they still exist in New York: surprises in rents. In one of his videos, Caleb Simpson finds a young American paying just $1,100 in rent for his apartment. But the bargain has a different price. The apartment is just 86 square feet, the equivalent of almost eight square meters.

"Everything on shares" is the daily stock exchange shot from the WELT business editorial team. Every morning from 5 a.m. with the financial journalists from WELT. For stock market experts and beginners. Subscribe to the podcast on Spotify, Apple Podcast, Amazon Music and Deezer. Or directly via RSS feed.