Singapore now ranks among top 10 most expensive cities in Asia for expatriates

Source : Straits Times – 11 Jun 2009

SINGAPORE has become one of the 10 most expensive cities in Asia for expatriates to live, according to a new cost-of-living survey.

The Republic’s promotion from 13th spot last year to 10th in the ECA International survey, is largely down to price increases not slowing as quickly as elsewhere in Asia.

This is despite a weakening Singapore dollar making goods and services that much cheaper here for foreigners.

The strengthening of the yen saw the region’s top four spots taken up by Japanese cities.

Tokyo reclaimed its position as Asia’s most expensive city, followed by Nagoya, Yokohama and Kobe.

Explaining Singapore’s move up the ranks, Mr Lee Quane, regional director of ECA Asia, said: ‘Prices have not slowed down as much in Singapore as in other parts of Asia.’

The pace of increase in prices of goods and services in countries such as China and Malaysia, for instance, has slowed down by half. Prices are down by just one quarter in Singapore, said Mr Quane.

Still, Singapore remains a more affordable place than long-time rival Hong Kong, where the cost of living is being driven up by the strength of the Hong Kong dollar, which is pegged to the US dollar.

Hong Kong jumped from 98th spot to 29th in the global ranking, and is the seventh most costly city in Asia.

Globally, Singapore came in 72nd, up from being 114th last year.

Seoul, Kuala Lumpur, Jakarta, Manila and New Delhi are among the Asian cities which have become relatively cheaper for expatriates.

The survey found that the cost of living in Asia has increased relative to the United States and Europe, given that the West has been hit hardest by the global financial crisis.

So, while inflation has slowed in many Asian cities compared to a year ago, it has fallen more dramatically in many Western countries where growth has been slower.

Singapore International Chamber of Commerce (SICC) chief executive Phillip Overmyer says global companies with operations in Singapore are feeling the pinch.

‘We’re seeing demand coming down, yet costs remain very high,’ making Singapore and some other Asian cities very expensive places to operate, he warned.

‘What I see going on right now are serious evaluations (by companies). Where do we go if we need to move? What do we do if recession is going to last for a few years?’

Ms Jane Fraser, 38, an advertising executive, said the cost of living in Singapore is still ‘reasonably bearable’. However, housing rents, which have been steadily declining of late, are still a bugbear, she said.

ECA carries out its survey twice a year to help multinational companies calculate remuneration packages and living costs for expatriates. The study compares a basket of 125 consumer goods and services commonly bought by expats in over 370 locations and measures these items against inflation, availability of goods and exchange rates.

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Most expensive cities in Asia

1. Tokyo (1)

2. Nagoya (4)

3. Yokohama (2)

4. Kobe (5)

5. Beijing (10)

6. Shanghai (12)

7. Hong Kong (9)

8. Shenzhen (16)

9. Guangzhou (15)

10. Singapore (13)

Bracket indicates March 2008 ranking