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Top 10 Cheapest Cities In The World

Updated on April 12, 2015

Introduction

Ever wondered where would be a cheap place to live? Wonder no more as this page lists the cheapest major cities in the world in which to live as of February 2009.

The initial aim was for it to be a list of the top 10 cheapest cities in the world in which to live. However, as will become apparent there are more than 10 cities on the list, and this is due to there being more than one city at position number 10 on the list, and so they have all been listed below.

10 (Joint). Johannesburg

In joint tenth place on the list of cheapest cities in the world is the south African city of Johannesburg. Johannesburg is the largest city in South Africa, and has the largest economy of any city within Africa. This is due to the size of the city, as well as the resources which surround it which include both gold and diamonds. In addition, Johannesburg is the hub of Southern African travel. Despite this the cost of living in Johannesburg is very low and this could be due to many reasons. Firstly, due to the city being located in Africa labour is relatively cheap. In addition building for housing occurs quite a lot, and so housing cost can be cheap, especially when compared to cities of a similar size in western nations. Finally currency fluctuations at the time of compiling the stats led to South Africa being cheap. All of these factors combine to position Johannesburg joint tenth on a list of least expensive cities in the world in which to live.

Part of central Johannesburg.  Taken by Mister-E and distributed under Creative Commons Attribution v2.0 license.
Part of central Johannesburg. Taken by Mister-E and distributed under Creative Commons Attribution v2.0 license.

10 (Joint). Bucharest

Bucharest appears joint tenth on the list of least expensive cities to live in. Along with being the capital of Romania, Bucharest has the largest population of any Romanian city at 2 million, and is the political, cultural and economic heart of the country. Being the major city in Romania leads to the majority of large Romanian businesses being headquartered in the city. In addition many international companies have their national or regional offices in Bucharest or the surrounding regions. The economy grew in the lead up to, and after accession to the European Union, but recently the entire Romanian economy has been affected by the global credit crisis leading to exchange rate changes. As a result of Romania being one of the poorest regions within the European Union, local wages are relatively low, and therefore there is also a low cost for most goods and services which leads to Bucharest having the joint tenth lowest cost of living of any major city worldwide.

The Palace of the Romanian Parliament in Bucharest.  Taken by Mele22 and distributed under Creative Commons Attricution ShareAlike 3.0 license.
The Palace of the Romanian Parliament in Bucharest. Taken by Mele22 and distributed under Creative Commons Attricution ShareAlike 3.0 license.

10 (Joint). Pretoria

Pretoria appears joint tenth on the list, along with Bucharest and it's fellow South African city of Johannesburg. Pretoria is one of the three capitals of South Africa, and as such several major companies are located here although the city can sometimes be overshadowed by it's much larger neighbour, Johannesburg. Like Johannesburg, Pretoria is located near to many gold and diamond mines, and so this brings the city a certain degree of wealth. However, despite this the wages are still low by western standards. This combined with good infrastructure leading to low costs and plenty of land for building leads to Pretoria being joint tenth on a list of the least expensive cities in which to live.

A photograph of the central business district (CBD) of Pretoria.
A photograph of the central business district (CBD) of Pretoria.

8 (Joint). Kiev

The city of Kiev is the joint eighth on the list of inexpensive cities in which to live. Kiev is the capital city of Ukraine which is an eastern European country. A former Soviet nation, it has attempted to switch to a market based economy over the last few years. Heavy industry and agriculture play a big part in the Ukrainian economy, and Kiev is the location of many of these industrial sites. In addition to heavy industry Kiev also has many other economic drivers. As Kiev is by far the largest city in the Ukraine, many Ukrainian and international businesses have headquarters or regional bases in the city. Kiev also has very good infrastructure and this combined with the relatively low cost of property leads to cheap goods and services. As can be seen all of these factors combine to lead to Kiev being joint 8th on a list of the least expensive most expensive cities in the world to live in.

Motherland Statue at the Museum of the Great Patriotic War in Kiev.  Photo by Marianivka and distributed under GNU Free Documentation License Version 1.2.
Motherland Statue at the Museum of the Great Patriotic War in Kiev. Photo by Marianivka and distributed under GNU Free Documentation License Version 1.2.

8 (Joint). Asunción

Asunción is the largest city in the South American country of Paraguay, and is also this county's capital. It appears joint 8th on the list of most inexpensive cities in the world in which to live. Asunción is the shortened name for the city - the extended version is Nuestra Señora Santa María de la Asunción which means Our Lady, Holy Mary of the Assumption. Like many other cities in the world, Asunción has grown in size until it's metropolitan area encompasses many other towns and cities. However, it is still relatively small in population size relative to many other South American cities, with a metropolitan population of less than 2 million. As with many capital cities, Asunción has a primarily service based economy, with over 80% of workers finding employment in fields such as teaching, banking and retail. However, considerable manufacturing does take place in Asunción, mainly dealing with the processing of agricultural goods such as cotton, flour and cattle. There has been relatively little economic growth across Paraguay for over 20 years and this has had an effect upon the city of Asunción, with the effect that it has depressed the cost of goods and property. This is a primary reason which leads to Asunción being the joint eighth cheapest city in the world.

Asunción at sunset.  Picture taken by Alex-S and licensed under Creative Commons Attribution License Version 2.0.
Asunción at sunset. Picture taken by Alex-S and licensed under Creative Commons Attribution License Version 2.0.

7. Manila

Manila appears seventh on the list of least expensive cities ranked in terms of the cost of living. Manila is the capital city of the Philipines, and is the centre of the country's largest metropolitan area. However, the population of 1.4 million means that Manila is only the second largest city in the Philippines, with Quezon City being first with over 2.5 million inhabitants. Despite the fact that the area where Manila now stands having been the location for settlements for possibly thousands of years, the city really grew under the colonial rule of various countries. These foreign powers included Spain, the UK, the USA and during World War II Japan. Even after independence for the Philippines from US rule in 1946 Manila was not made the capital city until 1976. Nowadays the greater Manila area is at the centre of the economy of the Philippines, and is very diversified. There are industrial plants which manufacture many things including, but not limited to consumer electronics, chemicals and clothing. Tourism is playing an increasing role in the economy of Manila, and each year in excess of a million visitors come. Manila is also the major port for the Philippines, and all forms of retailing from markets through to malls play a big part. Finally there are also all of the governmental offices, and company headquarters which add an additional strand to the city's economy. However, the cost of living in Manila is till relatively low. Goods and services are relatively cheap due to low labour costs. These are due to the large numbers of relatively poorer people who gravitate towards Manila from the more outlying areas of the Philipines every year. Also outside of a few premium areas, the cost of property is low. Finally the Philippines earned a lot of money from remittances sent back by people who worked abroad, but with the global downturn these are starting to fall. Finally recent exchange rate movements have led to it being cheaper when compared with the currencies used by some of the major world economies. All of these factors combine to make Manila the 7th cheapest city in the world to live in.

Night time view of the Manila skyline taken by Vanessa David and licensed under Creative Commons Attribution License Version 2.0.
Night time view of the Manila skyline taken by Vanessa David and licensed under Creative Commons Attribution License Version 2.0.

6. Tripoli

Tripoli appears sixth on the list of the cheapest cities in the world. Tripoli is both the largest and capital city of the north African country of Libya. The history of Tripoli stretches back thousands of years to before the Roman period. Tripoli has a population of over 1.5 million, and was an economic hub for the north African region for many years up until the mid 1980s. However, Libya was the recipient of various sanctions due to the sponsorship of terrorism which had an impact upon the capital city of Tripoli. However, more recently the country has opened up once again after the lifting of sanctions, leading to Tripoli experiencing increased economic growth. The local economy is multi-layered. Tripoli is the heart of the Libyan economy with the vast majority of major Libyan companies having their headquarters here. Tourism is also a rapidly growing part of the local economy. Tripoli has a relatively well developed infrastructure, with a major port and airport, and this leads to cheap costs associated with transporting of goods. It is this, coupled with the generous local taxation policies which leads to Triploli being the 6th least expensive place in the world in which to live.

This is a view of some of the buildings in Tripoli along with some of the coastline of the natural harbour.  It is produced by StartAgain and distributed under Creative Commons Attribution-No Derivative Works 2.0 License.
This is a view of some of the buildings in Tripoli along with some of the coastline of the natural harbour. It is produced by StartAgain and distributed under Creative Commons Attribution-No Derivative Works 2.0 License.

5. Kathmandu

The Nepalese capital city of Kathmandu appears fifth on the list of the least expensive cities in the world in which to live. In addition to being the capital city of Nepal, Kathmandu is also the largest and most developed city within the country. It is nestled in Kathmandu Valley within the Himalayas mountain range. Until recently Nepal was in a state of war with armed communist insurgents operating throughout the country, which has led to economic growth being retarded. However within the last few years the country has become much more peaceful, leading to quite rapid economic growth. The main industry in Kathmandu is tourism, attracted to the city because of it's uniqueness, as well as the city being a useful gateway to the Himalayan mountain ranges. Within Kathmandu there are a large number of Buddhist Temples and palaces and these are very impressive, and unlike anything in most of the western world. Like the vast majority of cities on this list of the top 10 cheapest cities, Kathmandu had the best infrastructure in the country, and this is what partly explains the low cost of living. In addition, there is a low average wage, which leads to cheaper goods and services. These factors, along with others, lead to Kathmandu occupying 5th place in the countdown of the cheapest major cities in the world.

A view of Kathmandu City nestled in Kathmandu Valley with the Himalayan Mountains in the background.  Originallly produced by aNantaB and distributed under Creative Commons Attribution 2.0 License.
A view of Kathmandu City nestled in Kathmandu Valley with the Himalayan Mountains in the background. Originallly produced by aNantaB and distributed under Creative Commons Attribution 2.0 License.

4. New Delhi

New Delhi appears fourth on the list of the top 10 cheapest cities in the world to live in. The Indian capital, it is a relatively new city having been constructed primarily in the last 100 years. It was originally planned by the British as the seat of governance for the colony of India, and was designed by the distinguished English architect Edwin Lutyens. New Delhi is situated south of Delhi, and was originally separated. However, due to urbanisation, the two cities are now joined into one massive metropolis. The vast majority of statistics which are relevant for New Delhi are part of this wider region, and so this makes it hard to get solid figures for the city. However in population terms New Delhi is relatively small, with a population of just over 300,000 people, although the metropolitan area has the second highest population of any metropolis in India. Being the political heart of such a vast country means that the a large part of the economy of New Delhi is sustained by the administration of the nation. Despite being the political capital of India, the financial capital is Mumbai. However, commerce and services are playing an increasing part in the economy of New Delhi. The local wages within New Delhi are relatively high by Indian standards for many of the residents. In addition, the price of goods and services are low, partly due to low Indian labour costs and partly due to currency fluctuations. These two factors combined lead to New Delhi being the fourth most inexpensive major city in the world in which to live.

Gates and arches are major landmarks in many capital cities (for example the Arc de Triomphe in Paris) and this is New Delhi's version - India Gate.  Produced by Shashwat_Nagpal and produced under Creative Commons Attribution License Version 2.0.
Gates and arches are major landmarks in many capital cities (for example the Arc de Triomphe in Paris) and this is New Delhi's version - India Gate. Produced by Shashwat_Nagpal and produced under Creative Commons Attribution License Version 2.0.

3. Mumbai

The third most expensive city in the world in terms of living costs is Mumbai. Mumbai has the largest population of any city in India, and was previously known as Bombay. In addition, whilst New Delhi is the political capital of India, Mumbai is the commercial and cultural capital of the country. Mumbai is home to the main port in the country, the primary stock exchanges, and Bollywood which is the Indian equivalent of Hollywood. Mumbai is the location for many of the largest Indian companies, and many international companies co-ordinate their activities for the entire southern Asian region from here. All of these factors combine to result in Mumbai having a vibrant local economy with wages approximately three times greater than the Indian average. Goods and services in Mumbai have low costs realtive to local wages due to three primary factors. Firstly local wages are higher than other areas than India, which leads to more income available. Secondly transportation and production of goods is cheap due to the good local infrastructure which includes a major port. Finally, the low wages elsewhere in India leads to low prices for goods and services from outside the Mumbai region. In addition, these low wages lead to a large number of immigrants to Mumbai who often work in unskilled jobs, thus reducing the cost of such goods and services further. These three factors combine to make Mumbai the third cheapest major city in the world to live in.

View of the coastline of Mumbai.  Photo by Sajpics distributed under Creative Commons Attribution-Share Alike 2.0 License.
View of the coastline of Mumbai. Photo by Sajpics distributed under Creative Commons Attribution-Share Alike 2.0 License.

2. Tehran

Tehran comes second on the list of the top ten cheapest major cities in the world. Tehran is the capital of Iran, and also has the largest population of any city within this country at over 7 million for the city proper and approximately 15 million for the metropolitan area. Tehran is a city in the shadow of the Alborz mountains, and so part of the local economy is dependent on tourism. However, the primary parts of the economy of Tehran are linked to manufacturing, construction and services. Tehran is the main base for the administration of Iran, and so this leads to many public sector jobs. In addition, Tehran is the business heart of Iran with many Iranian businesses based in the city. Due to the isolated nature of Iran due to it's political regime, very few major western companies do business in the country. This means that many items used in the country are manufactured in and around Tehran including textiles, consumer electronics and vehicles. Finally there are many private sector service based jobs, such as retailing, which account for a large percentage of the workforce in Tehran. This means that there is a relatively diversified economy in Tehran, with employment being across a wide range of industries. In Tehran the tax rate is low compared with many western countries, and so this decreases the cost of living. In addition, energy costs are also very low, partly due to the large fossil fuel reserves of Iran. Tehran also has relatively high wages, particularly compared with elsewhere in Iran and surrounding countries. The low cost of purchasing goods and services, coupled with these regionally high wages, leads to Tehran being the second most inexpensive major city in the world.

This is a photo of the north of Tehran with the mountains Alborz mountains to the rear.  Photo by Siamax and distributed under GNU Free Documentation License, Version 1.2.
This is a photo of the north of Tehran with the mountains Alborz mountains to the rear. Photo by Siamax and distributed under GNU Free Documentation License, Version 1.2.

1. Karachi

The least expensive city in the world in which to live is the Pakistani city of Karachi. There are several large cities within Pakistan, but Karachi is the largest with a population which according to the United Nations is in excess of 12 million. Whilst the political capital of Pakistan is Islamabad, Karachi is definitely the economic centre. It is home to the largest port in Pakistan situated in a sheltered natural harbour, and it is this which originally provided the conditions for the city to grow. Whilst the port continues to play an important part in economy of Karachi, the economy has diversified. Karachi is the location for the headquarters for many of the largest Pakistani companies, as well as being the location for the Pakistani offices of many international firms. Manufacturing plays a big part in the local economy, and increasingly outsourcing of services from richer countries plays a part, particularly with call centres. All of these factors combine to result in Karachi having what has been claimed to be the highest average wage of any city in south Asia. However, despite the regionally high wages, Karachi is still located in south Asia, and so many of the prices for goods and services reflect this. In addition the excellent infrastructure links further reduce the price of imported goods. These high wages, coupled with low prices of goods and services, result in Karachi being the cheapest major city in the world in which to live.

One of the most iconic buildings in Karachi is the MCB Tower shown in this photo by Mohsin Hassan.
One of the most iconic buildings in Karachi is the MCB Tower shown in this photo by Mohsin Hassan.

If you could live in any of these cities, which one would you choose?

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