Wednesday, 12 March 2014

Singapore is ‘World’s Costliest City To Live In’

Update 28 Mar 2014

Singapore 60th in terms of cost of living for average residents: ACI


Rising costs for expatriates mostly due to appreciation of Singapore dollar, says Asia Competitiveness Institute

Following a study earlier this month that ranked Singapore as the costliest city for expatriates to live in, the Asia Competitiveness Institute (ACI) is considering the creation of a new affordability index to better reflect the cost of living for average citizens.

This index will cover four areas which affect average citizens the most, such as healthcare, edcuation, housing and transport, said ACI Co-Director Tan Khee Giap, allowing the Government to monitor costs of living and plan subsidies in a sustainable way.

He was speaking to the press during a conference where the Institute showed research results indicating that Singapore is only 60th in the world in terms of cost of living for average residents.

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Think-tank ranks S’pore 60th most costly city for residents

The Asia Competitiveness Institute’s proposed new affordability index will measure healthcare, education, housing and transport costs because they have public services that the Government facilitates, the think-tank says. TODAY file photo

To better reflect the cost of living for average citizens, a local think-tank is considering the creation of a new affordability index that measures transport, housing, healthcare and education costs.

The announcement yesterday by the Asia Competitiveness Institute (ACI), a research centre at the Lee Kuan Yew School of Public Policy, came amid a renewed debate on the rising cost of living in Singapore.

The debate was sparked off by an Economist Intelligence Unit (EIU) study earlier this month, which ranked Singapore as the world’s costliest place to live in.

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Singapore is ‘World’s Costliest City To Live In’

The Republic has become the world’s most expensive city to live in, a report from the Economist Intelligence Unit (EIU) showed yesterday, but local economists said Singapore will remain attractive for foreign businesses and expatriates with its good governance, robust infrastructure and quality workforce.

In the latest EIU report, Worldwide Cost of Living, Singapore jumped five spots from last year to go to the top of a list of 131 cities, ahead of Paris in second place and Oslo in third, while Tokyo — last year’s first — dropped to sixth due to a sharply weaker yen.

This marks a huge leap from a decade ago when the Republic ranked 18th in the same survey. But the EIU described Singapore’s rise as “steady rather than spectacular”, due partly to the 40 per cent appreciation in the local currency in 10 years.


Cost of living reports do not reflect costs for locals: DPM Tharman

Cost of living reports — such as the one released by the Economist Intelligence Unit which ranked Singapore as the costliest place to live in — are meant to measure cost of living for expatriates in various parts of the world, and thus do not reflect those of local residents, said Deputy Prime Minister Tharman Shanmugaratnam today (Mar 5).

There are two things which make a big difference when comparing cost of living for expatriates and locals, Mr Tharman said, as he wrapped up the Budget debate in Parliament.

The first is currency, he said. 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 item is improved.


Expatriate living costs survey do not reflect locals' costs: Tharman
Cost-of-living reports, such as the Economist Intelligence Unit one that has just ranked Singapore the priciest city in the world, are aimed at comparing costs of living for expatriates and thus do not reflect the cost of living for a local resident, Finance Minister Tharman Shanmugaratnam said in his wrap-up speech on the Budget debate on Wednesday

There are thus two important differences between what such reports measure and what affects the living costs of Singaporeans, he added.

One is currency. "An important reason why we've become expensive for expatriates is that the Singapore dollar has strengthened," said Mr Tharman.

That makes things pricier for an expatriate who is paid in a foreign currency. But it improves Singaporeans' purchasing power, both at home when buying imported goods, and abroad.


DPM refutes S’pore being costliest place to live in

Mr Tharman said that the EIU report is meant to measure the cost of living for expatriates in various parts of the world, and thus does not reflect the cost of living for locals.

He added that there are 2 things which make a big difference when comparing cost of living for expatriates and locals:
  1. 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.
  2. difference in items being measured – the EIU study measured items such as imported cheese, which may not be purchased by Singapore residents.

Singapore’s public transport cost is also significantly cheaper than other cities like Tokyo and Paris, Mr Tharman said.


DPM THARMAN: EIU'S RECENT COST OF LIVING REPORT DOESN'T APPLY TO LOCALS
The EIU survey had placed Singapore as the number 1 most expensive city in the world

As Singaporeans lament over the rising cost of living in Singapore with the recent report released by the Economic Intelligence Unit (EIU) confirming our sentiments, DPM Tharman has come out to say that these reports do not actually reflect the situation faced by locals.

However, Tharman explained that these rankings measure costs for expats from around the world rather than the costs faced by locals.

The main difference, he explained is the fact that expats are much more heavily impacted by exchange rates so when Singapore's currency is strong, Singapore will become much more expensive to live in.



Rebutting Tharman on Cost of Living

However, Mr Tharman didn’t point out that most of the “strengthening of the Singapore dollar” took place before 2011.

The Singapore dollar exchange rate movements against the US Dollar and Euro are more accurately characterized as being ‘locked in a stable range since 2011′, not ‘strengthening since 2011′.

If Singapore dollar exchange rates are overlaid on Singapore’s cost of living ranking from the EIU then it becomes clear the “strengthening Singapore dollar” isn’t a good reason why Singapore took the number one spot in the 2014 report. See charts above.


You Now Have The Right To Complain

In Singapore, we do whatever it takes to be the first in everything. It doesn’t matter if we have to drive like Mad Max just to beat the car in front of us to the PIE exit, or if we have to charge like a lion bringing down a gazelle just to sit on the only MRT train seat available – we must be first!

As of today, we can now proudly proclaim that we are indeed first. That’s right! We have just won the gold medal when it comes to being the most expensive city in the world, beating out cities like Paris, Oslo, Zurich, and Sydney to claim this year’s #1 spot.

So for those of you who have been lamenting for years that the cost of living in Singapore is becoming increasingly unaffordable – congratulations, you now have more proof to back up your claims.


Singapore’s No.1 ranking in EIU cost of living survey

Mr Tharman said the strengthening of the Singapore dollar makes Singapore goods expensive for someone who is paid in a foreign currency. Firstly, many expatriates are given the choice of being paid in Singapore dollars. Secondly, the EIU cost of living survey ranks countries based on prices of goods and services only, it does not rank countries based on how affordable goods and services are relative to salaries. Singapore’s No.1 ranking in the EIU cost of living survey has everything to do with prices and nothing to do with salaries or the currency of salaries. Therefore, Mr Tharman’s argument about someone being paid in a foreign currency is completely irrelevant in so far as Singapore is No.1 ranking in the EIU cost of living survey is concerned.

According to EIU’s Worldwide Cost of Living 2014 summary report, prices gathered are converted into a central currency (US dollars) using a prevailing exchange rate. So the strengthening of the Singapore dollar should make our goods and services cheaper when denominated in US dollars. That would lower our cost of living ranking, not raise it. The fact that our cost of living ranking has shot up through the roof despite more favourable exchange rates shows that Singapore price inflation has been more severe than could be contained by currency strengthening.

Mr Tharman also said that a stronger Singapore dollar makes imported goods cheaper. But the reality is that Singapore’s imported goods have become more expensive, not cheaper. The strengthening of the Singapore dollar merely allows importers to make better margins without necessarily lowering the prices of the goods they import.


Life in the world's most expensive city - Seah Chiang Nee

Singaporeans will likely huddle around their TV sets in June to watch World Cup soccer – but only if they pay, once again, a fee higher than anyone else on earth.

To cynics, this is merely in keeping with their newly declared status of belonging to the world’s most expensive city. In 2010, the cable companies bid so high for the telecast rights that they charged fans S$70.50 (RM181) to watch. Negotiations are still on, but the costs are likely to be at least as high. This World Cup TV cost is probably the best way to describe how ordinary Singaporean lives are affected.

That we are a top high-cost place has been known to us for some time, but few Singaporeans – if any – had imagined we would be Number One. Full story


Singapore’s No. 1 ranking in EIU Cost of Living Survey

Mr Tharman said the strengthening of the Singapore dollar makes Singapore goods expensive for someone who is paid in a foreign currency. Firstly, many expatriates are given the choice of being paid in Singapore dollars. Secondly, the EIU cost of living survey ranks countries based on prices of goods and services only, it does not rank countries based on how affordable goods and services are relative to salaries. Singapore’s No.1 ranking in the EIU cost of living survey has everything to do with prices and nothing to do with salaries or the currency of salaries. Therefore, Mr Tharman’s argument about someone being paid in a foreign currency is completely irrelevant in so far as Singapore is No.1 ranking in the EIU cost of living survey is concerned.

Since most goods in Singapore are imported, the strengthening of the Singapore dollar vis-a-vis the USD will not affect the USD price of these imported goods.

Mr Tharman also said that a stronger Singapore dollar makes imported goods cheaper. But the reality is that Singapore’s imported goods have become more expensive, not cheaper. The strengthening of the Singapore dollar merely allows importers to make better margins without necessarily lowering the prices of the goods they import.


The world’s most expensive city revealed
Singapore has been voted the world’s most expensive destination. Picture: Supplied Source: News Limited

Singapore has dethroned the Japanese capital to become the world’s most expensive city in 2014, according to the Economist Intelligence Unit’s latest Worldwide Cost of Living survey.

The biannual report, which ranks 131 global cities, credits currency appreciation, solid price inflation and high costs of living for Singapore’s dubious new distinction.

“Car costs have very high related certificate of entitlement fees attached to them, which makes Singapore significantly more expensive than any other location when it comes to running a car,” says the report.


Singapore is the world's costliest city, Mumbai, Delhi cheapest

Singapore has topped a list of 131 cities globally to become the world's most expensive cities to live in 2014, according to the Economist Intelligence Unit (EIU), reported by the BBC. India's major cities - including Mumbai and New Delhi - were found to be among the least expensive in the world.

Mumbai's prices are kept low by large income inequality, this BBC report stated, adding that the low wages of many of the city's workers keep spending low, and government subsidies have helped them stay that way.

Singapore's strong currency combined with the high cost of running a car and soaring utility bills contributed to Singapore topping the list. Incidentally, Singapore is also the most expensive place in the world to buy clothes.


SDP: HERE'S HOW WE CAN MAKE SINGAPORE LESS EXPENSIVE
The Economist Intelligence Unit (EIU) has, perhaps not surprisingly, named Singapore the most expensive city in the world. But rather than just lash out at the PAP Government for this dubious achievement, the SDP will propose constructive measures to lower the cost of living for Singaporeans

First, housing is extremely expensive in Singapore because of of high HDB prices. Young couples nowadays have to borrow huge amounts of money to pay off their housing loans, usually for 25 to 30 years using their CPF funds. This, of course, deprives us of our retirement income.

Second, much of the dramatic rise in living expenses can be traced to the massive influx of foreigners. With more people, the demand for housing and cars (COEs) escalate. At the same time, wages are depressed especially for lower-income workers.

The third item that makes Singapore so expensive for our citizens is healthcare costs. The SDP has proposed in our National Healthcare Plan that the government pays the bulk of the premiums in a national insurance scheme called the National Health Investment Fund (NHIF).


Singapore named the world's most expensive city
Singapore has been moving up the ranks of the world's most expensive cities to live in over the last decade

Singapore has topped 131 cities globally to become the world's most expensive city to live in 2014, according to the Economist Intelligence Unit (EIU).

The city's strong currency combined with the high cost of running a car and soaring utility bills contributed to Singapore topping the list. It is also the most expensive place in the world to buy clothes.

Singapore replaces Tokyo, which topped the list in 2013.





Singapore, the Most Expensive City in the World
– Wall Street Journal: What You Said: City Costs Provoke Impassioned Response
– A Singaporean In Australia: I’m Not Saying that Tharman was Lying
– My Singapore News: World’s most expensive and cheapest cities- Trading place
– Musings From the Lion City: Singapore; World’s Costliest City
– Kevin Chia: I would love to smoke that when we are living in the most expensive city
– Vicky Grueber: Dear Singapore
– WSJ: Is Singapore the World’s Costliest City? For Expats Only, Minister Says
– TOC: Cost of living – expats vs locals
– Jay Teo: Calm Down Sporeans, Our Country Is Not The Most Expensive For You
– 5 Stars & a Moon: “World’s Costliest” survey for expatriates and travellers
– Blogging for Myself: Really, SG is most expensive city?
– Mr. Miyagi: Don’t Eat Cheese And Don’t Drive
– Singapore Man of Leisure: Do you trust yourself?
– A Brit in Singapore: Singapore – the most expensive city to live in…
– Diary of An Expat in Singapore: Singapore: Most Expensive City in the World
– Everything Also Complain: Singapore is the most expensive city for expats only
– L.A.M.: L.A.M. on How to Survive in the World’s Most Expensive City
– Wall Street Journal: The World’s Most Expensive City Now Sits in Southeast Asia
– Money $mart: You Now Have The Right To Complain, Singapore Rank
– Benjamin Chiang: Sg may be ‘most expensive city’ but it’s important we know why
– Limpeh Foreign Talent: Is Spore really the most expensive city in the world to live in?
– L.A.M.: why the Most Expensive City in the World in 2014 is Singapore
– My Singapore News: World’s most expensive city!
– Neurotic Ramblings of a Sg Couple: 5 things more expensive in Australia than in SG
– The Little Things Yvonne & Janelle Do: Spore named the world’s most expensive city
– Cheated Singaporean: Incompetence of PAP resulting in rising cost of living
– New Nation: S’poreans saddened super high cost of living finally caught up with Sg
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