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June 13, 2012

Melbourne is now ranked the 15th most expensive city in the world.Melbourne is now ranked the 15th most expensive city in the world. Photo: Jessica Shapiro

Six of seven mainland Australian capitals are more expensive than New York, three are rated dearer than London – and the strong dollar and steep rents are to blame.

Sydney, Melbourne and Perth now rank as among the world’s 19 most expensive cities, while the UK capital dropped to 25th spot, according to the 2012 Mercer Worldwide Cost of Living Survey, used by companies to determine pay, loadings and benefits for far-flung employees.

The top three Australian cities for cost lagged behind Tokyo, Japan, and Luanda, the capital of Angola, while Japan’s Osaka and Russia’s Moscow rounded out the four most costly cities.

<p></p> Sydney jumped to the No. 11 spot in the survey from No. 14 spot last year. Melbourne went to 15th spot from 21st, ahead of China’s Beijing and Shanghai.

”Cities in Australia and New Zealand witnessed some of the biggest jumps, as their currencies strengthened significantly against the US dollar,” said Mercer principal Nathalie Constantin-Metral, who oversaw the compilation of the list.

“Demand for rental properties has also increased significantly in all the Australian cities we rank … Coupled with very limited availability, the result has been very tight markets and increased prices,” she said.

By a variety of rankings, Australian cities are among the most expensive places to live and do business in. Housing remains among the most unaffordable in the developed world, according to anti-planning group Demographia.

The Economist ranks Australia as having among the most overvalued property markets.

Over the 12 months to June, the Australian dollar traded between US95¢ and $US1.10, well above its long-term average.

Mercer, the global financial services and recruitment group, measured costs in US dollars in creating the index.

Darwin was the only mainland capital that did not feature in the Mercer report.

Read more: http://www.theage.com.au/business/our-cities-among-worlds-most-costly-20120612-208az.html#ixzz1xcaWFhQc

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