Based on the Worldwide Cost of Living survey done by Economist Intelligence Unit (EIU) this year, Singapore hits the highest index of living cost in the world again. Being conducted on 133 cities worldwide from New York and London to Tokyo and Shanghai, the research survey compares cost of living indices in different cities, involving prices of more than 160 services and products.
According to BBC, Singapore was found to be 11% more expensive than New York for basic groceries and to be the most expensive place in the world for clothes, not to mention Singapore’s Certificate of Entitlement (CoE) system that makes car prices excessively expensive. The generalization of the data might have ignited some critical questions for those who are planning to relocate to this state-island city. The answer could be very subjective.
Singapore Economy and Taxes Scheme
Singapore is a small country that owns not so many natural and land resources. But this situation has successfully encouraged the city to be the world’s top logistic hub, according to World Bank, benefiting from its very strategic location. It is now the central of financial and banking in South East Asia, a mature service market, as well as possessing a well-developed system for business, trade, education, urban infrastructures, and tourism. It is an attractive city for entrepreneurs and working professionals, due to its low-tax and efficient system.
However, Singapore’s economy depends heavily on exports and refining imported goods, especially in manufacturing (Department of Statistics Singapore, 2007). In general, important products would be more expensive in Singapore. There are also special taxes imposed on specific goods with particular policy, such as automobile, alcoholic beverages and cigarettes. So basically, if you are a westerner who is highly dependent on imported daily products from your own country; chances are that the products might be extremely more expensive for you than what you have purchased somewhere else before.
The progressive income taxes scheme in Singapore is considerably low, with rates that ranges progressively from 2 to 20% from a resident’s yearly gross income, where the first SGD 20,000 will be non-taxable. This would make a big difference, being compared to other country with high tax system, because it will leverage the sum of your yearly take home pay if you are working in Singapore. That would make the proportion of your daily expenses smaller, even for the imported products.
Living Cost Depending on Lifestyle
In defining the real living cost in Singapore could be tricky depending on your lifestyle. More importantly, the city actually offers you several different lifestyle options for every aspect of life. Transportation, for instance, is very expensive if you are buying a car. But if you opt for public transportation, SMRT and SBS transit system, or active transportation such walking and biking, the cost would be significantly lower than anywhere in the world. The transportation in Singapore is also practical and time efficient.
For enjoying any kind of cuisines, there would be a lot of food and beverages options in different places, ranging from hawker centers (the cheapest places but well-known for the cuisine originality and deliciousness) to fine-dining Michelin Star restaurants. You could find yourself hop around in between. Sometimes, if you are a single professional who is still living alone, eating outside could be considerably cheaper and more practical than homemade cooking.
Shopping and lifestyle or recreational expenses also highly depend on where, how often, and for what kind of things you are spending your money. Singapore offers some variants of shopping and commercial centers, making the city as one of shopping heavens for worldwide shoppers. Public facilities (such sports and swimming halls) are also provided by the state, as well as public entertainments (such exhibition, music and arts center, parks and gardens), community centers, not to mention the private or exclusive ones (where you should be a member and pay more membership fee for such activities, or buy tickets for particular events and access).
Housing seems to be the only items that is in reality proven to be one of the factors that makes Singapore to be the most expensive city in the world. This will require a deep understanding on its real estate system and urban development. But still you will have several options when you are hunting for a place to stay. Different options (with different hunting methodology) in Singapore property market could drive you to different amount of monthly expenses. It is subject to whether you would like to stay in a private condominium or public housing unit managed by the HDB (Housing and Development Board). Getting a place based on a friend or family reference does matter, because property agent fee could be very costly. Nevertheless, once you get used to the city environment, in the end you will likely to find a well-suited scenario for providing a house.
It seems that in general, Singapore is still affordable and attractive to be live in, despite its label to be the most expensive city in the world. Money wise, many people chose to live there because the city offers a good standard of living, lively and sophisticated urban lifestyle, as well as comfortable city infrastructures that work well, and practical urban services that are worth the price.