The cities with the best value for money in the world for 2026, where the high cost of living is offset more effectively
If there is one thing that nearly all of the world’s top cities have in common, it is that they are expensive places to live, work, and enjoy leisure activities.
The high inflation environment of recent years has only exacerbated this problem, pushing the cost of living firmly to the top of the agenda for both residents and policymakers.
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The Nightmare on the Street with the Roofs
Within this already rather “gray” landscape, there is one area that is particularly significant and increasingly bleak: the cost of housing.
According to Oxford Economics, residents in the top 100 cities of the 2026 Global Cities Index spend, on average, 20% of their disposable income on housing and utilities.
However, this figure encompasses significant variations and city-level factors that have become increasingly pronounced in recent decades. This is because affordability in many markets has been constrained by excessive demand and insufficient supply, pushing up rents and housing prices relative to real incomes.
At the high end of the cost spectrum are cities such as Vancouver, Oakland, and London, which are known for their high prices and have very high housing costs—about 30% of disposable income (and much higher in central neighborhoods).
At the other end of the spectrum are cities that are comparatively more “affordable.”
This is due to a combination of lower total housing costs (Singapore) and higher disposable incomes (Canberra, San Jose), which means that the high cost of living is offset more effectively.
Asia-Pacific, the “paradise”
Cities in Asia–Pacific offer the best combination of quality of life and affordability.
However, city life isn’t just a financial decision. Yes, access to typically higher-paying jobs is a major advantage for many, and therefore the cost of living and housing will be a significant factor.
But a high quality of life is equally important and includes access to recreational and cultural facilities and activities, as well as a sense of safety in the urban environment.
This raises the question: Are there cities that offer the best of both worlds—that is, lower housing costs and a higher quality of life?
The cities that perform best when comparing both metrics are largely located in the Asia-Pacific region.
These are Canberra, Singapore, Taipei, and Hong Kong.
This does not mean they are “affordable,” but compared to many Western cities, they appear to offer better value for money with a higher quality of life.
Canberra, in particular, ranks at the top of the overall Quality of Life category, mainly thanks to high life expectancy, lower income inequality, and higher median incomes, supported by an abundance of stable, well-paid public-sector jobs.
The latter certainly helps maintain affordability by boosting incomes, while the city’s planned environment can make land more readily available for development, especially compared to cities like Sydney and Melbourne. This helps support the supply side, keeping the balance with demand more under control than elsewhere.
For Singapore, high life expectancy and a very low crime rate help the city perform well in the Quality of Life category, while housing remains relatively affordable due to the government’s model of housing provision and subsidies.
Large-scale housing construction programs and generous subsidies offered to residents have helped keep prices in check and have significantly increased homeownership rates in the city-state, making high rents a rarity.
The Situation in Europe
Other Asian cities have also performed relatively well for similar reasons, and this state-led model is something that cities in the West, cities like London, for example, might want to emulate.
Vienna is another city with a similar model that focuses on public housing, helping to make the Austrian capital more affordable than comparable European cities of similar size, while also making it a desirable place to live.
Among smaller European cities of a similar size, Valletta (Malta) and Ljubljana (Slovenia) also offer good value, although both capitals are becoming increasingly expensive.
This is an “unfortunate byproduct” (sic) of strong demand, driven by rapidly growing local economies, and, in the case of Valletta, limited space and a sharp increase in short-term rentals linked to the booming tourism sector.
Consequently, the era in which these cities were considered “affordable” locations may be coming to an end, even though they offer a high quality of life.
challenging the linear cause-and-effect approach
In any case, the world’s major cities possess an enduring appeal that will persist despite offering weaker “value.”
A notable feature of this type of analysis is that the world’s major cities—New York, London, and Tokyo — seem to offer a far less desirable combination of quality of life and affordability, mainly because housing costs are extremely high relative to incomes.
However, they retain an enduring appeal that continues to draw people from all over the world.
Why is this the case?
The vast array of opportunities in the job market and access to world-class cultural and recreational activities and events are unparalleled.
Cities like Canberra and Valletta cannot (and do not aspire to) offer the kind of lifestyle available in these major cities.
Therefore, the assessment made by the millions of residents who choose to live there is that the higher cost of housing and the generally higher cost of living are a price worth paying for access to employment and the amenities on offer.
Oxford Economics does not expect these fundamentals to change anytime soon, and so these “megacities” will continue to offer enough value to attract and retain their residents.
Their economic appeal remains strong, especially when combined with a good quality of life, even if that quality of life is not as high as elsewhere. This is particularly true for younger workers who are just starting their careers and need a vast and deep labor market to climb the career ladder.
Smaller cities, no matter how high the quality of life may be, will always struggle to compete with cities like London, New York, Paris, Tokyo, and Los Angeles.
Ultimately, this shows how value is defined differently around the world. Cities like Singapore demonstrate how it is possible to combine a very high quality of life with relatively lower housing costs, offering a model that many more expensive cities are beginning to look to.
But that doesn’t mean cities like London and New York are any less attractive; and the higher housing costs are simply a fact of life that many will tolerate in order to live there, if nothing else, given the many benefits these cities can offer for long-term career development.
In any case, beautiful cities are, ultimately, those with happy residents. And that is a challenge that is becoming increasingly difficult to meet.
Source: in.gr
