Skip to main content

Advertisement

Advertisement

S’pore still most expensive city for expats

SINGAPORE — The Republic has emerged as the world’s most expensive city for the second year running, in the latest Worldwide Cost of Living 2015 survey findings released by the Economist Intelligence Unit (EIU) yesterday.

SINGAPORE — The Republic has emerged as the world’s most expensive city for the second year running, in the latest Worldwide Cost of Living 2015 survey findings released by the Economist Intelligence Unit (EIU) yesterday.

The latest report, which is meant as a guide for human resource managers to calculate compensation packages for expatriates and business travellers, looked at last year’s prices. Singapore was followed by Paris, Oslo, Zurich and Sydney, which was unchanged from the order last year.

Changes in the ranking are in part affected by currency movements and do not necessarily reflect price changes in a country. The EIU said the Swiss cities of Zurich and Geneva would have beaten Singapore to the top position if the unpegging of the Swiss franc from the euro in January had been taken into account.

This year’s survey looked at the cost of living in 133 cities and used New York as a base, comparing the prices of 160 services and products last year, ranging from food to transport.

Singapore and Seoul were ranked the priciest places to shop for clothing. “The malls of Orchard Road (offer) a price premium that is over 50 per cent higher than in New York,” the EIU noted in its report. It said the Certificate of Entitlement system to control vehicle growth has led to excessive car prices, leading to transport costs here being thrice those in New York.

When Singapore topped last year’s ranking, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said in Parliament that the survey is meant to measure cost of living for expatriates and does not reflect daily living costs for local residents.

He noted that the Singapore dollar has strengthened over the years, making it more expensive for expatriates who are paid in foreign currency. He also cited other surveys with different results, such as one by the Asia Competitiveness Institute in 2012, which ranked Singapore fifth out of 109 cities for cost of living for expatriates and 61st for Singapore residents.

Inflation here last year was low, with the Consumer Price Index for general households rising 1 per cent, and is expected to remain low this year.

Commenting on the latest results, EIU senior economist Toby Iles said the survey is not focused on the cost of living for locals, but there is some overlap. “Many Singaporeans and expats will have some similarities in their consumption patterns,” he added.

Mr Jon Copestake, EIU’s chief retail and consumer goods analyst and editor of the report, reiterated that the study is to allow companies to assess remuneration for the movement of staff between cities.

Comparison between studies would be impossible if local tastes and goods are accounted for and the cost of living would diverge even more between cities if such a methodology was used, he said. But he added: “It is worth bearing in mind that, even though the cost of living in Singapore is high, relative incomes are also high.”

Meanwhile, the EIU said it is extremely rare for the same five cities to achieve rankings identical to last year’s report, given currency fluctuations. For example, in mid-2014, Singapore was in fourth place, but a stronger United States dollar and weaker euro subsequently pushed European cities further down the chart.

The EIU also noted that despite its top ranking, prices in Singapore in some categories such as basic groceries are still comparable to those in its Asian counterparts. For example, groceries here cost 11 per cent more than in New York, but this pales compared with Seoul, where groceries cost 49 per cent more than in New York.

Cost-of-living rankings will also see further changes due to factors such as currency instability alongside falling oil prices, which has a deflationary impact on pricing, the EIU said.

 

Top 10 most costly cities in EIU report

 

1. Singapore

2. Paris (France)

3. Oslo (Norway)

4. Zurich (Switzerland)

5. Sydney (Australia)

6. Melbourne (Australia)

7. Geneva (Switzerland)

8. Copenhagen (Denmark)

9. Hong Kong

10. Seoul (South Korea)

Read more of the latest in

Advertisement

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.