Consider Jackie, a rising star IT manager who has been tapped for a major assignment leading her company’s overseas team. The job opportunity is hard to turn down: a salary bump, the chance to expand on proven leadership skills, and a bucket list cultural experience in a bustling, trending international destination. While all tempting enticements, however, Jackie must also factor in cost-of-living comparisons to know if such a relocation makes financial sense for her and her family.

With global mobility leaders predicting an increase in global relocations this year, transferees like Jackie should consider cost-of-living comparisons in advance. Here are some key factors to evaluate.

The Cost of Housing

One might argue that housing is getting pricier everywhere. But perhaps nowhere more so than in large European and Asian markets, according to a recent article in Relocate magazine. It notes that property in many large cities in Europe and Asia has become very expensive to rent. “London’s experience is quite typical of most successful big cities,” said Liam Bailey with KnightFrank. “They are all struggling with housing market affordability.”

And even within the same country, housing costs span a broad range. “For example, the cost of living in a large metropolitan area may be higher than the cost of living in a rural area,” according to Atlas International. “Similarly, the cost of living in Tokyo is higher than the cost of living in many other parts of Japan. And the cost of living in Switzerland is generally higher than the cost of living in neighboring countries like France and Germany.”

Even if employee Jackie is only moving from one region of the US to another, the cost of housing may be significantly different.

Insurance Costs

The cost of international health insurance policies varies dramatically from region to region. For a transferee moving from the US to an assignment abroad, the premium may actually come in lower. That’s because US individual insurance premiums in 2024 averaged more than $15,000, compared to average premiums in Singapore, for example, of just $6,855.

Regardless of the corner of the world, however, expats can expect insurance costs to rise during their assignment thanks to inflation, increased demand for services and fewer insurance providers. “Insurers like Aetna have withdrawn from international markets, reducing competition and limiting options for consumers,” says Expat Network. “This shift often results in higher premiums as remaining providers face less pressure to keep costs down.”

Food Costs

The cost of food is another major part of living cost, and is influenced by multiple factors. “The cost of food and groceries is a significant component of the overall cost of living, and it is profoundly influenced by the interplay between local agriculture and import costs,” notes Dubai-based Faster Capital.  “On one hand, regions with robust local agriculture can often provide fresher produce at lower prices due to reduced transportation and storage costs. On the other hand, areas that rely heavily on imported goods may face higher food prices due to import tariffs, long-distance shipping fees, and the complexities of international supply chains. These factors not only affect the price tags on store shelves but also have broader economic and environmental implications.”

What impact will the cost of food have on an expat’s living costs in a new location? Consider things like availability of locally sourced, fresh food and whether those are priced at a premium; how remote your location is in relation to the transportation that delivers agricultural products; and import costs that can put a bite in your grocery budget.

Education Costs

For our fictional transferee Jackie who is relocating with school-age children, it’s especially important to compare education costs between the current and future locations. Many European countries place a premium on K-12 education costs for non-residents, creating stark disparities that expats should factor into their living expenses.

For example, says Faster Capital, “In Singapore, there’s a tiered system where citizens pay less than permanent residents, who in turn pay less than international students. This system reflects the government’s prioritization of its citizens in the allocation of educational resources.”

In addition, don’t overlook additional expenses that can quickly add up. “In Japan, school uniforms are a significant expense, while in the United States, extracurricular activities and sports can add up,” notes Faster Capital. “In many parts of Africa, even the cost of basic school supplies can be prohibitive.”

Helping Expats Make Informed Relocations

These and many other factors – tax considerations, utility costs, transportation and fuel expenses, to name a few – combine to make any relocation a complex decision. Many organizations routinely offer cost of living adjustments (COLA) to help assignees balance differences in their cost of living in their new location.

CapRelo has more than two decades of experience helping global mobility teams craft COLA policies, and guiding assignees in navigating the cultural and financial environments before, during and after relocations. Let our relocation management experts set your transferees up for smooth transitions and successful assignments with our best-in-class relocation services.