Out of 109 major cities across the globe, Singapore came in as the most expensive city for expatriates in 2012, according to a study by the Asia Competitiveness Institute (ACI) and reported in the media.
But this was mainly due to a big gain in the Singapore dollar against the US dollar in recent years.
“The biggest reason why Singapore has gone from position 17 in 2005 to the most expensive in 2012 is due to the exchange rate effect,” said Tan Kee Giap, ACI’s Co-director for Public Policy.
“If we take away the 25 percent appreciation of the Singapore dollar, our results actually show that for the cost of living for expats, we are 16th, which is not much difference from 2005.”
However, Singapore took 60th spot in terms of living expenses for locals in 2012. This means the cost of living here is still cheaper compared to other major cities such as Hong Kong, Paris, London and New York.
For instance, the overall cost of living for Singaporeans in 2012 was 35 percent cheaper compared to New York. Housing was also 27 percent more affordable, while medical and education costs were lower by 75 percent and 73 percent respectively.
The relatively low cost of living for locals is attributed to government subsidies in housing, healthcare and education. But the cost of transportation, as well as alcohol and tobacco was higher in Singapore by 22 percent and 86 percent respectively.
“This is because we have years of subsidies on these three areas and I think after 2011, we found even more targeted subsidies for these three areas and even go on to transportation,” added Tan.
Using data from 2005 to 2012, the study looked into the living expenses and purchasing power of both expatriates and ordinary residents.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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