Lifestyle

South African cities ranked as some of the cheapest in the world

Staff Writer

 ·22 Mar 2017

While Singapore has retained its title as the most expensive city in the world, two South African cities feature on the other end of The Economist’s cost of living index.

The index, which uses New York as its baseline for comparing global prices, is based on a bi-annual Economist Intelligence Unit (EIU) survey that compares more than 400 individual prices across 160 products and services.

These include food, drink, clothing, household supplies and personal care items, home rent, transport, utility bills, private schools, domestic help and recreational costs.

More than 50,000 individual prices are collected in each survey, EIU said.

Only two South African cities were listed in the latest ranking: Johannesburg (116th out of 133) and Pretoria (123rd), which both feature on the ‘cheap’ end of the global comparison.

The index gives New York prices the value of 100, and ranks cities with costs relative to that. Singapore’s score is 120, meaning its prices are 20% more expensive than in New York.

Johannesburg’s score is 51, while Pretoria’s score is 48 – meaning prices in South African cities are roughly half those found in New York.

According to The Economist, fluctuating oil and commodity prices have had the biggest impact on the global cost of living, with oil prices bottoming out in 2016, and the decline in commodity prices slowing.

While this has contained prices in mature markets, keeping inflation low, inflation has risen in developing markets.

More relevant to a country like South Africa, however, is that with commodity prices on the rise again, currencies in commodity-depending areas have seen a resurgence, with the rand coming out as one of the strongest performers.

Inflation data released by Stats SA on Wednesday (22 March) showed that South Africa managed to rein in its inflation to 6.3% in February 2017. This is still outside the Reserve Bank’s upper bracket target of 6.0%.

The rate was 0.3 of a percentage point lower than the corresponding annual rate of 6.6% in January 2017. On average, prices increased by 1.1% between January 2017 and February 2017.

The most and least expensive cities in the world

Other cost of living indicators

While not covered in the EIU survey, Cape Town and Durban appear with Johannesburg and Pretoria in Numbeo’s Cost of Living Index, which ranks cities based on user-sourced data.

According to the index, Pretoria is ranked higher than Johannesburg (contrary to EIU’s data from September), followed by Cape Town and then Durban as the cheapest major metro in the country.

A recent Quality of Life report from Mercer also found that Durban offered the highest quality of life in South Africa, ahead of Cape Town and Johannesburg. Pretoria did not feature.

Mercer’s Cost of Living Survey for 2016 found that Cape Town was a cheaper city to live in than Johannesburg.

Read: Durban is still the best place to live in SA – despite losing the Commonwealth Games