The Economist Intelligence Unit, the research and analysis division of The Economist Group this week ranked the world’s priciest cities. Of the 10 most expensive cities, five are in Asia. Singapore came out at No. 1, followed by Hong Kong. The third-most expensive city is Zurich, Switzerland, the city with the highest cost of living in Europe.
The study rated the cities according to how expensive it is to buy basic items there at supermarkets, mid-priced stores and speciality outlets, using the price of food, drinks, clothing, recreation and entertainment and the cost of buying and running a car (including the cost of gasoline).
It also includes recurring expenses, including the cost of renting a home, utility bills, private schools and domestic help. It takes into account the relative strength of each of the countries’ respective currencies.
DPM Tharman spoke on this in 2014:
There are two things which make a big difference when comparing the cost of living for expatriates and locals.
The first, he said, is currency — in Singapore’s case, the Singapore dollar has strengthened over the years, and this means it is more expensive for expatriates who are paid in a foreign currency.
A stronger Singapore dollar also improves lives in Singapore, as purchasing power for items is improved, he added.
The second factor is the difference in items being measured — the EIU study measured items such as imported cheese, which may not be purchased by Singapore residents.
“So for example, the EIU basket includes imported cheese, filet mignon, Burberry-type raincoats, four best seats in a theatre, three-course high-end dinners for four people… I don’t think they’re irrelevant to an expatriate cost of living basket but it’s quite different from cost of living basket for Singaporeans.
“For some of these items, Singapore is quite expensive. Transport is also part of the cost of living basket for these cost of living indexes but no public transport — it’s just cars and taxis. And our public transport as you know, is in fact significantly cheaper than most other cities (like) New York, London and Tokyo.
“We’re comparable to Hong Kong but significantly cheaper than most other cities, even our taxi fares are cheaper”
For expats, cars and gasoline in Singapore are definitely more expensive from wherever they came from. They will not enjoy the housing subsidies or the tax rebates that Singaporeans enjoy. Heck, even their medical bills will be much more as compared to our polyclinic bills.
What is important for the government, is that Singaporeans, particularly those in the low and middle-income groups, have incomes that grew faster.
The annual EIU survey is great at keeping Singapore at the top of its list.
Expats have to accept that while Singapore has all the infrastructures that they ever need to support them in their businesses, it is not going to be a cheap place for them to live in.
Singaporeans must take pride that despite being the world’s most expensive city, the government ensures that it remains very much affordable, for the locals specially, through subsidies and tax breaks.