This morning, my news feed was flooded by a wave of articles and comments about Singapore being the most expensive city to live in. Apparently the Economist Intelligence Unit came up with a research paper and it was picked up by Bloomberg and BBC, among other international and local publications.
After living in Singapore for the past 25 years, I find this statement to be lacking in accuracy from the perspective of a local citizen.
Yes, Singapore may not be the cheapest place in the world, but the average Singaporean is doing pretty alright financially. So before people start packing their bags and move to India, Syria or Nepal to enjoy the lowest costs of living in the world (according to the survey), let’s take a look at the facts:
1. The Survey Was Meant To Be A Relocation Tool Using New York City As A Base Of Comparison.
This is a very important point of consideration because one of the key points mentioned is that in the last decade, Singapore’s currency (SGD) has strengthened by up to 40% against the US dollar. What this means is that because of the SGD appreciation, it is 40% more expensive for someone living in America (with USD) to move to Singapore.
The point which most local Singaporeans fail to realize is that conversely, this means it is cheaper for Singaporeans to travel to USA because our Singapore dollars can be exchanged for more USD now!
The currency appreciation is in fact great news for Singaporean citizens because our currency is worth much more when we travel overseas.
Doesn’t seem so “expensive” anymore does it?
USD to SGD over the last 5 years
2. Transportation Cost
Another key point brought up is the price of transportation. This is mainly in reference to the cost of car ownership and they (EIU) contrasted it by saying it is 3 times higher than that in New York.
This is true for an expat who is relocating to Singapore and wants to continue to own a car in our already crowded city.
The good news is, most people in Singapore don’t have to own a car since we can use public transport. Compared to other countries, our public transport fare is lower than in Hong Kong, London, New York, and Tokyo. And I am not just talking about the MRT trains and buses. You can still save money by taking taxis all the time compared to driving a car (about half the cost!)
3. Energy And Utilities Costs
Being a country as small as Singapore without much natural resources, we are pretty dependent on our neighbours to provide us with water and energy. The government is taking steps to reduce dependence by investing in water desalination, but we are still some time away from being totally independent. The economics survey stated that our utilities price is the 3rd most expensive (I am curious as to who the first two are, anybody knows?). However, it is also important to see the extent to which this makes Singapore “expensive”.
After a little bit of digging, I found this document from Singapore Power. What it basically says is that for a typical 4-room HDB flat, the utilities bill is about S$100. Compared to other countries, this is higher. However, compared to your total expenses, this number pales in comparison.
Conclusion: Price of utilities in Singapore is high. But the absolute value is relatively small to make a big impact.
4. Singapore Is The Most Expensive Place To Buy Clothes
This is an inaccurate statement. The researchers came to this conclusion because there are many luxury brands setting up shops here.
But think about it, these brands do not come here to increase the price of clothes. They come to Singapore because there is a market for luxury fashion and the consumers are demanding it!
This does not mean that clothes in Singapore are really the most expensive in the world. It just means that on average, fashion in Singapore is expensive because it is skewed by these high priced luxury brands.
Why are clothes in places like Mumbai and Damascus cheaper? That’s because most luxury brands do not even exist in those countries. As a result, the average cost per item is very low.
By giving Singaporeans more choices of consumption, can we really say that the cost of living here is necessarily most expensive?
Research and surveys are a great way for us to get a big picture of a country or any particular situation for that matter. It is easy for consumers to read and digest information in a quick manner.
However, we have to recognize the limitations of such a method and realize that not everything can be generalized in the same manner.
This article was originally written by Jay Teo, cofounder of BigSpoon.sg, and is republished with permission.
Also read: [Wow] Singapore officially the world’s most expensive city to live in
