The cost of living crisis isn't a headline anymore. It's a lived reality for millions of people in cities around the world. Groceries cost more. Rent keeps climbing. And the gap between what people earn and what they spend has never felt wider. But here's the thing most news articles won't tell you: not every city is getting more expensive at the same rate. Some are accelerating. Others are quietly becoming more affordable. And a handful of cities that were once considered "cheap" have started creeping toward unaffordability themselves.
Using our Anchor Cost Index data from 160 cities worldwide, we dug into the numbers to find out which cities are squeezing residents the hardest in 2026, which ones offer genuine relief, and what the data actually says about where the crisis is headed.
The State of Living Costs in 2026
Let's start with the big picture. Across our dataset, the median Anchor Cost Index sits at around 50 on our 0-100 scale. Cities scoring above 80 are genuinely expensive by global standards. Cities below 30 offer remarkable value. The trouble is that the cluster of cities scoring 85 and above has grown considerably over the past two years, while the number of truly affordable major cities has shrunk.
What's driving this? Three forces are colliding at once. First, housing supply hasn't kept pace with demand in most major English-speaking cities. Second, energy costs, though lower than the 2022-2023 peak, remain elevated across Europe and Oceania. Third, wage growth has been uneven: high earners in tech and finance have seen raises that push up local prices, while service-sector workers and young professionals find themselves priced out of the very neighborhoods they work in.
The result is a two-speed economy playing out at the city level. If you're earning in US dollars or British pounds and living in Buenos Aires or Kuala Lumpur, life has arguably gotten better. If you're a local earning a local salary in London or Toronto, the squeeze is real.
Cities Getting More Expensive
These are the cities where the cost of living crisis hits hardest. Not just because they're expensive in absolute terms, but because the trajectory is still pointing up.
London, United Kingdom
London scores a 92 on our Anchor Cost Index, placing it firmly among the world's most expensive cities. A one-bedroom apartment in central London now averages $3,080/month. Move outside the city center and you're still looking at $1,540. That's before utilities, which run about $360/month for a standard 85m² flat, or the $162 monthly Tube pass you'll need to commute.
What makes London's situation particularly painful is the utility picture. Basic utilities for an 85m² apartment cost $360/month here, compared to $180 in New York and $150 in Seoul. Energy prices in the UK have stabilized after the 2022 spike, but they stabilized at a level that's still roughly double what they were in 2019. A cappuccino costs $8.10. An inexpensive restaurant meal is $26. Even a McDonald's meal has crept up to $15.20.
The average monthly salary in London is $8,450, which sounds substantial until you realize that renting a modest city-center flat consumes over 36% of gross income. For families, the picture is starker: a three-bedroom apartment in central London runs $6,160/month, and international school fees hit $70,200/year.
Toronto, Canada
Toronto matches New York with an Anchor Cost Index of 95, making it one of the priciest cities in North America. A one-bedroom in downtown Toronto costs $2,940/month. An inexpensive restaurant meal runs $27.40, and a mid-range dinner for two is $137.
What sets Toronto apart is the speed of the increase. The city was considered affordable by North American standards just a decade ago. Now, a monthly transit pass costs $156, a gym membership runs $162, and basic groceries have climbed to levels that rival Manhattan. Utilities for a standard apartment are $290/month, driven by harsh winters and rising energy costs. Healthcare, which Canadians often assume is "free," tells a different story for non-covered services: a doctor visit averages $212, and a dentist visit is $297.
The average salary of $8,750/month puts Toronto's rent burden at a manageable-looking 25%, but that figure is misleading. It reflects average salaries, not median ones. For younger workers and recent immigrants, the rent-to-income ratio is often closer to 50%.
Sydney, Australia
With an Anchor Cost Index of 92, Sydney continues to be one of the most expensive cities in the Asia-Pacific region. A one-bedroom apartment in the city center costs $2,800/month, and a three-bedroom unit is $5,600.
Sydney's food costs are striking. An inexpensive restaurant meal costs $24.20, and a mid-range dinner for two comes to $121. Even a cappuccino is $7.70. Monthly utilities for a standard apartment run $280, and a monthly transit pass is $150. The average salary is $7,800/month, giving Sydney a rent burden of 27%, but the reality is harsher for anyone not in mining, finance, or tech.
The bigger concern in Sydney is property prices. At $18,000 per square meter in the city center, buying a home is essentially out of reach for first-time buyers. This is pushing more Australians into the rental market long-term, which in turn keeps rental demand (and prices) elevated.
Austin, United States
Austin is the cautionary tale of what happens when a "cheap" city becomes trendy. Its Anchor Cost Index of 92 now matches London and Sydney. A one-bedroom apartment in the city center costs $2,520/month. That's more expensive than many European capitals.
The tech boom that brought companies like Tesla, Oracle, and countless startups to Austin has been a double-edged sword. It created high-paying jobs but also pushed up housing costs far beyond what existing residents could absorb. A mid-range dinner for two costs $122, utilities run $260/month, and a monthly coworking membership is $576. For families, preschool costs $1,540/month and a three-bedroom apartment is $5,040.
Austin's average salary of $7,700/month keeps the rent burden ratio at 25%, but this average is heavily skewed by tech salaries. Musicians, artists, service workers, and longtime locals, the people who made Austin "weird" and desirable in the first place, are increasingly unable to afford it.
Cities Getting Cheaper (Or Holding Steady)
While the headlines focus on how expensive everything is getting, there are cities where the cost of living has remained stable or even improved for people earning in strong currencies. These aren't just "cheap" cities. They're cities where you can build a genuinely comfortable life at a fraction of what you'd spend in London or New York.
Buenos Aires, Argentina
Argentina's economic volatility has created an unusual situation for anyone earning in dollars, euros, or pounds. With an Anchor Cost Index of just 22, Buenos Aires is one of the most affordable major cities in the world. A one-bedroom apartment in the center of Palermo or Recoleta costs $490/month. A three-bedroom is $980. That's less than a studio in Austin.
The daily economics are equally dramatic. An inexpensive restaurant meal is $5.30. A cappuccino costs $2.20. A monthly transit pass is $26. Total utilities for a standard apartment run just $58/month. A digital nomad can live comfortably in Buenos Aires for around $1,005/month, total. That's less than what you'd pay for a parking spot in Manhattan.
The catch, of course, is that these prices reflect the devaluation of the Argentine peso. For locals earning an average of $750/month, the rent burden index is a painful 49%. Buenos Aires is simultaneously one of the cheapest and most unaffordable cities in our dataset, depending entirely on where your income comes from.
Tbilisi, Georgia
Georgia's capital has quietly become one of the most compelling destinations for remote workers and digital nomads. With an Anchor Cost Index of 40, Tbilisi offers a digital nomad lifestyle for approximately $1,836/month, including a comfortable apartment, food, transport, and entertainment.
Tbilisi's appeal goes beyond just being cheap. Georgia offers a generous one-year freelancer visa, the food and wine culture is extraordinary, and the city has a growing international community. A backpacker can get by on $1,496/month, while a family of three can live comfortably for about $3,087. Compare that to Toronto's $9,219 for the same family scenario.
The city has seen some price increases as its popularity has grown, but starting from such a low base means that even with inflation, Tbilisi remains remarkably affordable for anyone earning a Western salary.
Kuala Lumpur, Malaysia
If Buenos Aires is the value play and Tbilisi is the emerging gem, Kuala Lumpur is the reliable workhorse. With an Anchor Cost Index of 30, KL offers first-world infrastructure (modern transit, fast internet, excellent hospitals) at developing-world prices.
A one-bedroom apartment in the city center costs $700/month. An inexpensive restaurant meal is $5. A cappuccino is $2. Total monthly utilities for a standard apartment are just $65. The digital nomad budget comes to $1,116/month, making KL one of the most affordable cities in our dataset that doesn't require compromising on comfort or safety.
For families considering a move, KL is particularly attractive: a three-bedroom apartment outside the center is $800/month, preschool costs $180/month, and the small family budget scenario totals $2,036. That's less than what a single person would spend in London. Malaysia's DE Rantau digital nomad visa makes it straightforward to stay long-term.
The Housing Crisis Factor
Housing is the single biggest driver of the cost of living crisis, and it's where the disparities between cities become most stark. Here's what a one-bedroom city-center apartment costs across our focus cities:
- New York: $4,200/month
- London: $3,080/month
- Toronto: $2,940/month
- Sydney: $2,800/month
- Austin: $2,520/month
- Kuala Lumpur: $700/month
- Buenos Aires: $490/month
The gap is staggering. A one-bedroom in New York costs more than eight times what you'd pay in Buenos Aires. But the raw numbers only tell part of the story. What matters more is what percentage of local income goes to rent.
New York's rent burden index, which measures the ratio of rent to average salary, sits at 61. That means the typical resident is spending well over half their income just on housing. London and Sydney clock in at 27, Toronto at 25. These numbers look better, but they're calculated against average salaries of $7,800-8,750/month, which are far above what most workers actually earn.
Meanwhile, Buenos Aires has a rent burden of 49 despite having the cheapest rents on this list. Why? Because the average local salary is just $750/month. This is the core paradox of the global cost of living crisis: cheap cities aren't necessarily affordable for the people who actually live there.
The housing supply problem shows no signs of easing in the expensive cities. London, Toronto, and Sydney all have property prices above $18,000 per square meter in the city center. Mortgage rates in Toronto have climbed to 7.8%, and New York sits at 7.2%. This means buying is even less accessible than renting, trapping more people in a rental market where prices keep climbing.
Where to Move If You're Priced Out
If you're earning a remote income and feeling the squeeze in an expensive city, the data suggests several smart moves. The key is to look beyond just the cheapest option and consider the full picture: cost, quality of life, visa accessibility, and infrastructure.
If You're Leaving London
Consider Tbilisi. Your London salary would put you in the top tier of earners, the food and wine culture rivals southern Europe, and Georgia's freelancer visa makes the transition straightforward. Your $5,580/month London digital nomad budget would cover a family of three in Tbilisi with money left over. Use our city comparison tool to see the full breakdown.
If You're Leaving Toronto or New York
Buenos Aires offers the most dramatic savings. A Toronto digital nomad spending $5,611/month could live the same lifestyle in BA for roughly $1,005. That's an 82% reduction in living costs. The cultural scene, food quality, and architecture in neighborhoods like Palermo and San Telmo genuinely rival anything in North America.
If You Want Stability and Infrastructure
Kuala Lumpur is the safest bet. Reliable internet, modern healthcare, English widely spoken, and a digital nomad budget of $1,116/month. Unlike Buenos Aires, which can be volatile, KL offers predictable costs and a well-established expat community. It's the practical choice.
If You Want to Stay in Your Region
Not everyone wants to move to a different continent. For Londoners, cities like Lisbon, Budapest, or Warsaw offer European living at 40-60% less. For North Americans, Mexico City and Medellín stay in a similar time zone at a fraction of the cost. Australians might look at Chiang Mai or Ho Chi Minh City, both a short flight from home. Check the full city comparison to find your match.
How to Use Data to Make Better Decisions
The cost of living crisis is real, but it isn't uniform. The difference between struggling and thriving often comes down to geography, and making smart geographic decisions requires good data.
Here's how to start:
- Know your baseline. Use our Salary Calculator to understand exactly how far your current income stretches in your city. If your rent burden is above 40%, it's time to seriously consider alternatives.
- Compare apples to apples. Don't just look at rent. Use the city comparison tool to see the full cost picture: food, transport, utilities, entertainment. A city with cheap rent but expensive groceries might not actually save you money.
- Think about your scenario. A single digital nomad, a young family, and a retiring couple all have different needs. Our budget scenarios break costs down by lifestyle type so you can find the right fit.
- Look at the trend, not just the snapshot. A city that's cheap today but rapidly gentrifying (like Austin was five years ago) might not be cheap tomorrow. Pay attention to which cities are on the way up.
The cost of living crisis has created winners and losers, but it has also created opportunity. The rise of remote work means that for the first time in history, millions of people can choose where they live based on cost of living data rather than where their office happens to be. The cities profiled in this article span a range from $490 to $4,200 per month for a one-bedroom apartment. That's not just a price difference. It's a lifestyle difference. It's the difference between saving nothing and saving $3,000 a month.
The data is there. The tools are there. The question is whether you're willing to act on it. Start by exploring our full city database to see where your money goes furthest.