Is Mercer's cost of living survey reliable?

[rishab dhar]

http://www.financialexpress.com/news/luanda-is-worlds-most-expensive-city/816931/6

The most outrageous part

New Delhi (85) is India’s most expensive city followed by Mumbai (95)

I live in Delhi, and one of my relative lives in Mumbai suburb.

Our costs : I live in Dwarka (rental in a fully furnished 2 bedroom flat - Rs 14,000 (~$320/month)
Groceries+ Food+ eating out ( Rs 8000/month ~ $180/month)
Telephone (landline + cellphone) - Rs 2500/month ~ $60
Car (on loan) - Rs 10,000 ~$225
Gas @Rs 63/liter - Rs 5000 ~$110
Maid - Rs 2000 ~$45
Power bill (AC runs in 2 rooms for 9 months of the year) - Rs 6000/month ~$1300/month

Our costs ~ Rs 45k -Rs50k/ month

My relative: He lives in a pathetic area (compared to mine) -Andheri ( a suburb)
Rental for 2 bedroom flat - Rs 40000 ($900) - in Mumbai city rental for a flat in an area like Dwarka would be Rs 1.25 - Rs 1.5 lac ($3000 - $3500/month)
Groceries+Food+eating out etc - Rs 7000 ~ $160
Telephone - Rs 3000/month
Car ( on loan) -same car -Rs 11000/month (cars are costlier in Mumbai)
Gas @ Rs 69/liter - Rs 6000 ( He travels a lesser distance)
Maid - Rs 2500/month
Power - Rs 1500 ( He doesn't use AC, though I can't stand the muggy weather of Mumbai without an AC)

His expenses: Rs 70k +++

Did I mention that Delhi has a world class metro network, and one can easily do away with using my one's own car in Delhi.

Then How is Delhi more expensive than Mumbai? It truly amuses me.

 

[alain]

Then How is Delhi more expensive than Mumbai? It truly amuses me.

did the publish the methodology? Did they have a full report? You are just talking about your experience here

 

[bigbadwolf]

Then How is Delhi more expensive than Mumbai? It truly amuses me.

The Mercer study is not reliable. Furthermore it concentrates on an executive standard of living. So Luanda is going to be the most expensive city in the world -- if you want to live like a Western executive. Agree that Mumbai is probably more expensive that Delhi -- at least real estate is. A cousin of mine is commuting five hours each day in Mumbai because of the prohibitively high cost of property.

 

[rishab dhar]

@alain

This is just not experience (mine). Ask any Indian, he will 9 out 10 times say that Mumbai is more expensive than Delhi. Finally, in India people do not get Western salaries (per capita income in Mumbai and Delhi is almost same ~$3000), so if real estate is expensive your cost of living automatically jacks up. For this reason, Mumbai is full of slums. Although Delhi too has them, but they are definitely not a commonplace.

If you don't believe me, just visit Mumbai and Delhi. There is a huge difference in standard of living.

Roads are way way better in Delhi. Public transport is world-class (at-least Delhi Metro which has expanded everywhere is). Also, the suburbs of Delhi are not like those of Mumbai - they are open, full of swanky buildings, high quality housing, wide roads. As a result, it is not difficult to find Westerners living in Gurgaon, Noida, or in new areas of Delhi such as Dwarka.

However, when you move out from the main Mumbai city, the quality of everything takes a massive hit. People might talk about local trains in Mumbai, but I doubt that an expat would travel in those dilapidated non-air conditioned, cramped, and unsafe trains in Mumbai.

Finally as BBW said: his cousin travels 5 hours a day from suburbs to his office. This is one things from which Delhi , now, does not suffer, as majority of the corporate offices are located in Gurgaon, Noida, and Greater Noida, and cost of living in those places is not as prohibitively high, people rarely travel that much. Even if you were to live in Delhi ( as an expat) and travel to Gurgaon, it would barely take you 45 minutes by car from Connaught Place, which is around 30 km from Gurgaon, and 20 minutes by car from Dwarka, which is 23 km from Gurgaon.

Now even if you were to forget all this and say that you wanna live in the some of the poshest areas of delhi (presumably South Delhi), in areas such as Hauz Khas/Saket/Vasant Kunj/Safdarjung the rentals barely creep to Rs 30-35k/month, and believe me Delhi's posh areas are definitely posh, unlike those in Mumbai. Now if you wanna live in say posh areas of Mumbai such as Colaba
the rentals shoot up to 1.5l to 2.5l/month for a 2 bedroom flat, a rent for which you can get a super-luxury centrally air conditioned, complete power back-up (for AC's as well) 5 bedroom apartment in Gurgaon . Don't even think about buying to save rent! The cost fro 2 bedroom flat in those areas is around 5-6 crores ($1.3-$1.5 Million!).

Also, fuel in Mumbai is way way more expensive than in Delhi. Gasoline @ 69 in Mumbai vs 63 in Delhi. Diesel @ 45 in Mumbai vs 40 in Delhi.

Cars too are way more expensive to own in Mumbai than in Delhi.

Food in Mumbai costs around the same as in Delhi.

Also, if an expat were to live in Mumbai, he would also need an aircon 24 hrs a day 12 months a year. The mugginess of the weather would be unbearable. Mumbai is like Hong Kong in terms of weather, but about 4-5 degrees celcius hotter because it is closer to equator. If expats can't stand the heat of Hong Kong, I have no reason to believe that they can the heat of Mumbai. But electricity in Mumbai is also much much more expensive than in Delhi ( as much as 50%).

Therefore, I can't understand the logic behind Mumbai being cheaper than Delhi.

Delhi is somewhere between Mumbai and Bangalore. I believe Mumbai should definitely be among top 30 in the world in terms of cost of living (keeping quality of life same as in New York). Delhi should be somewhere between 50 and 80.

 

[joel_b]

Media reporting of any new survey / study etc is basically rock-bottom for news quality and integrity.

99% of the time the goal is to sum up something that is a large body of work in one headline, omit key caveats or misconstrue the facts, methodology and target audience of the study so much so that it is interpreted as general facts that are applicable to everyone (or a much wider demographic group).

 

[Anthony DeAngelis]

My girlfriend is in Delhi now and she has been telling me how surprised she is by the costs. Maybe she just likes expensive stuff lol

 

[rishab dhar]

@ Anthony

Wait till she goes to Mumbai. lol.

If I were to maintain my same standard of living I would definitely need a raise of 50-100% in my salary. ( I can't live in slums like more than 50% of Mumbaikars do, nor can I live in a house ( in this case apartment) that is close to a slum).

 

[rishab dhar]

http://www.numbeo.com/cost-of-livin...India&country2=India&city1=Delhi&city2=Mumbai

Came across another survey that shows that delhi/hurgaon are more expensive in Mumbai.

The price of

Volkswagen Golf 1.4 90 KW Trendline (Or Equivalent New Car) 27,438.82 $ 15,238.37 $ -44.46

is outrageous, as this car has not even been launched. It is slated to be launched at the end of 2011. So how come the cost comparison?

For the sake of comparison, the on road price of passat

On-Road Price Quote #17753157

Ex-Showroom New Delhi

23,80,000​

(A)
RTO

2,50,670​

(B)
Insurance

80,602​

(C)
On Road Price

27,11,272​

(E=A+B+C-D)

On-Road Price Quote #17753232

Ex-Showroom Mumbai

24,30,670​

(A)
RTO

2,30,760​

(B)
Insurance

92,075​

(C)
On Road Price

27,53,505​

(E=A+B+C-D)

Then the rental comparison

Rent Per Month [Edit] [Edit]
Apartment (1 bedroom) in City Centre 232.88 $ 448.16 $ +92.45 %
Apartment (1 bedroom) Outside of Centre 183.32 $ 269.91 $ +47.24 %
Apartment (3 bedrooms) in City Centre 733.12 $ 1,094.15 $ +49.25 %
Apartment (3 bedrooms) Outside of Centre 453.22 $ 642.12 $ +41.68 %

This is BS. The city center of Mumbai is South Mumbai (colaba/ Nariman Point area etc) not the suburbs. The stated rentals are even lower by standards of suburbs such as Andheri/Bandra. You can check the rentals out at any online real estate listing website such as 99acres.com/magicbricks.com etc. The rental would be closer to 80k-90k ($2000/month for 1 bedroom) in city center for Mumbai. The $450 cost would still be less by Andheri/Bandra standards where rentals would be closer to $500-$800/month.

Then the cost of buying real estate. This is a complete mockery.

Buy Apartment Price
[Edit] [Edit]
Price per Square Meter to Buy Apartment in City Centre 1,375.12 $ 2,283.55 $ +66.06 %
Price per Square Meter to Buy Apartment Outside of Centre 1,085.90 $ 1,090.89 $ +0.46 %

Now if anybody is willing to sell me Apartment @ Rs 100k/sqm (10k/sqft) in South Mumbai, I'll promptly sell my own house in Delhi and buy one in South Mumbai. Unfortunately, this is not so. The actual rates are $2000/sqf( $20k/sqm) t in city center and closer to $500-$1000/sqft in suburbs such as Andheri ( 2 Bedroom Apartments cost $500k-$600k in Andheri and $1M-$1.5m in central Mumbai. They've got rates even for Delhi completely wrong. The rates are $5k-$8k/sqm in prime areas such as Vasant Vihar. Outside the city center, the rates are around $2k-$4k/sqm.

 

[raywood]

Analysis of Mercer report: 229 Very Low-Cost Cities Around the World: Data Sources