Several interconnected factors contribute to certain cities being more expensive than others. In many expensive cities, especially major global hubs, there’s a limited amount of available land and housing, while demand from residents is high. This imbalance drives up property values and rental costs.

Prime locations within cities, particularly those with desirable amenities, good transportation, and proximity to jobs, tend to be the most expensive. Another strong factor is the city’s economy – cities with robust economies, particularly those that are financial centers or attract significant investment, tend to have higher costs of living. Experts at Henley & Partners devised a list of the most expensive cities across the world and the majority of them were in Europe. Lets take a look at which ones found themselves a part of the list.

1. Monaco

Monaco found itself at the overall top of the list, and this is due to a number of reasons. Monaco is the second-smallest country in the world, with a land area of only 2.02 square kilometers. This extreme scarcity of land leads to intense competition and high prices for property.

Their tax haven status is also a key contributor. Monaco’s lack of personal income tax and capital gains tax attracts wealthy individuals from around the globe, further increasing demand for luxury goods and services.

It’s also a popular destination for high-end tourism, with attractions like the Monte Carlo Casino and the Monaco Grand Prix. The city caters to wealthy visitors, supporting premium pricing across various sectors.

2. London 

Similarly, London’s high cost of living stems from a combination of factors including high demand for housing, limited space for construction.

The city is also rich in cultural attractions, vibrant nightlife, world-class amenities and has a huge influence in various fields, including fashion, media, and the arts, attracting a global audience, driving up demand and prices.

3. Saint-Jean-Cap-Ferrat

Situated on a peninsula between Nice and Monaco, Saint-Jean-Cap-Ferrat offers breathtaking views and a secluded atmosphere. The city is an exclusive location, with luxurious properties, and a history of attracting wealthy residents and celebrities.

The area boasts lavish villas, often with meticulously maintained gardens, private beaches, and impressive architecture. It has a long history of attracting wealthy individuals, including European royalty, aristocrats, and celebrities, further solidifying its reputation.

It even coined itself the ‘Peninsula of Billionaires’. This nickname reflects the area’s status as a playground for the world’s wealthiest individuals, further driving up property values.

4. Paris 

Paris is one of the most visited cities in the world, attracting millions of tourists each year. This influx of tourists puts pressure on prices, especially in popular tourist areas, where hotels, restaurants, and attractions tend to be more expensive.

France is a highly centralized country, with many key industries and government institutions located in Paris. This concentration of power and resources further contributes to the city’s high cost of living.

While Paris may have dropped in some global rankings due to currency fluctuations and other factors, it remains expensive due to high inflation and the cost of living generally increasing across the board.

5. Geneva 

Geneva boasts a robust economy, particularly in sectors like banking, pharmaceuticals, and international organisations, resulting in high average salaries. This strong economic foundation supports premium pricing across various sectors.

The Swiss Franc against other currencies makes imported goods more expensive, contributing to overall high prices in the city.

While expensive, Geneva offers a high quality of life, including excellent public services, safety, and a picturesque environment, which justifies some of the cost for those who value these aspects.

6. Nice

Nice’s attractive Mediterranean climate, beautiful scenery, and vibrant culture make it a highly sought-after location for both tourists and residents. This high demand, especially in desirable central and seaside neighborhoods, leads to increased property values and rental costs.

The city attracts a wealthy clientele, with a strong emphasis on luxury goods, dining, and entertainment. This contributes to higher prices for groceries, dining out, and leisure activities.

7. Portofino

Portofino’s high cost of living is primarily due to its transformation beginning in the early 20th century, from a quaint fishing village into a glamorous resort town favored by the wealthy and famous. This has driven up property values, created demand for high-end services and accommodations, and made it a sought-after destination for tourism.

The demand for property and luxury services in Portofino far exceeds the limited space available, especially given the town’s small size. This scarcity drives up prices for everything from real estate to hotel rooms and dining.

8. Cannes

Cannes has a reputation as a glamorous destination, hosting the prestigious Cannes Film Festival, and its desirable Mediterranean location.

The annual Cannes Film Festival is a major event that attracts celebrities, filmmakers, and media from around the globe, significantly increasing demand for hotels, restaurants, and other services, and consequently driving up prices.

The city’s location on the French Riviera, with its beautiful beaches, Mediterranean climate, and proximity to other desirable destinations like Monaco, contributes to its high property values and overall cost of living, says a real estate agency.

9. Lugano

As the largest Italian-speaking city in Switzerland, Lugano blends Swiss efficiency with Italian charm, but this also means a focus on luxury goods and experiences which adds to the expense.

The concentration on finance, pharmaceuticals, and engineering, which are high-skill industries, ensures high wages and further drives up costs.

Switzerland in general boasts one of the highest GDPs per capita globally, leading to high wages and a strong purchasing power for its residents.

10. Antibes

Cap d’Antibes is known for its ultra-luxurious villas and high property values, with prices potentially reaching €15,000 per square meter for top-tier homes. The area offers privacy, stunning scenery, and proximity to gourmet restaurants and luxury hotels, making it a desirable location for the affluent.

It’s also a popular destination for the rich and famous, with a vibrant nightlife and upscale shopping options. Its famous marina, Port Vauban, is home to some of the most expensive yachts in the world, further solidifying its image as a playground for the wealthy.