Moscow The Expensive

Long-time Muscovites and limited-term expats alike can complain for hours about the high cost of living in Moscow. Yet, when they do, they are talking about two different cities. 

The first is the Moscow of temporary business visitors and affluent expatriates. This Moscow has replaced Tokyo as the world’s most expensive city, according to the annual cost of living survey by Mercer Human Resource Consulting. Mercer’s survey measures the comparative cost of living for expatriate workers in 144 cities worldwide, and is used to help multinational companies and governments determine compensation allowances for their employees. From fourth place in Mercer’s 2005 ranking, Moscow leap-frogged Seoul, Tokyo and Hong Kong to claim the top spot.

Moscow’s rating rose primarily due to soaring property prices, according to Anna Krotova, senior researcher at Mercer. Rent for a two-bedroom, luxury apartment in downtown Moscow can cost $3,000, compared to $2,975 in London and $3,497 in New York. Moscow also apparently boasts the most expensive coffee – at $5.37, according to Mercer. A lunch for five people may cost upwards of $80.

All this adds up to a monthly bill of at least $8,500 for a foreign top manager, the Russian daily Vedomosti wrote, quoting an expat financier working for a Russian bank. Around $3,000 goes for rent, $1,000 pays for a car with driver, and the same amounts go to food, international phone calls and a baby sitter.  Another $1,500 per month is spent on international airfare. 

Another top-manager who heads a restaurant chain, told Vedomosti that he spends at least €4,500 a month in Moscow, as compared to €1,000 in Hamburg. 

Yet many long-term expats trim their costs by finding cheaper goods and services than those offered at top hotels and fancy stores, and also by using Moscow’s excellent – and cheap – metro, which Mercer did not include as part of their survey. 

Natives live in a different Moscow. Still quite expensive, it is not near as bad as Mercer ratings say. According to the Economist Intelligence Unit (EIU), Moscow is the world’s 22nd most expensive city – up from 35th place three years ago, and on a par with New York and Dublin. 

EIU rates cities based on the cost of living for residents, evaluating the prices for food, public transportation and utilities. But EIU does not include costs related to purchase or lease of real estate.  This makes it a more realistic gauge of Muscovites’ way of life, since many residents received apartments from the State during the Soviet era and now pay only utilities. The average salary of a Muscovite is around $500 a month. “Saving on a lease and shopping more cheaply,” one manager told Russian Life, “a single person can live comfortably on $700 a month, or $1,200 for a couple.”

But no matter which Moscow one lives in, many say the prices are simply too high, given the status of the infrastructure and the quality of services. But, then again, there is a cost for being at the center of the action.

Most expensive 

former ussr cities

1. Moscow

12. St. Petersburg

21. Kiev, Ukraine

52. Almaty, Kazakstan

81. Riga, Latvia

Numbers are world ranking. Source: Mercer Human Resource Consulting.