Looking in-depth to separate the facts from the myths.
When the Economist Intelligence Unit (EIU) reported that Singapore clinched yet another “number one,” this time in being the world most expensive city to live in, our social media feed erupted with many opinions, most of whom agreeing with the study.
Netizens had a great day, blaming the current government for the plights of everything that is wrong, (and expensive), in Singapore; Property prices, car prices, Nasi Padang prices, our low salaries.
On the flip side, we had people (not naming anyone), cherry picking on assumptions within the EIU study that they disagreed with, and which they believed contributed to the inaccurate top ranking that Singapore had gained.
Are these people right?
What the EIU study actually implies for Singapore
It is important to go beyond headlines, and look more in details on what are the assumptions and implications that the EIU study actually brought up. These are 3 points we want to share.
1. Our cost of living has MOST DEFINITELY, increased over the last 13 years
It is always amusing when politicians, who had no previous disagreement with a study, suddenly feel the need to question the assumptions and relevance of it. The EIU study is a good example.
The simple truth is that this survey had already been around for a long time. Back in 2001, Singapore was ranked 97th in being the world most expensive city. In 2011, our ranking had climbed to 6th. Today we are 1st.
This is not a random survey that just came from nowhere. For years, Government and business leaders had taken reference from the information found within this study to assist them in making key decisions. Just because we do not like the finding this year does not automatically enable us to discount its credibility.
You may not agree that this EIU study is accurate (and in that case we challenge anyone to tell us which studies we should take reference from instead), but you can’t disagree with the fact that based on the same methodology that the EIU had applied consistently over the past decade, we have become more expensive compared to other cities around.
2. A strong Singapore dollar (SGD) have made us more expensive
Since the EIU study uses New York as a reference point, all cost is converted back to US Dollar (USD). A strong SGD will equate into higher cost when converted to USD.
In 2001, the USD/SGD rate was about 1.80. Today, it is about 1.27.
Our traditional SGD$1 ice cream cost about USD$0.55 back in 2001. Today, the ice cream sells at SGD$1.10, which is equivalent to about USD$0.87. Other food items include chicken rice, which used to cost about SGD$2 (or USD$1.11), and sells today at about SGD$3 (or USD$2.36).
As you can see, our strong currency has most definitely played a major part in how others are viewing the cost of living in Singapore.
3. Alcohol is really expensive…in Singapore
We are not fervent consumers of alcohol at DollarsAndSense.sg so we have no qualms about the increased in taxes for alcohol that the government has recently introduced in its budget. We thought alcohol in Singapore was already expensive, but we didn’t know it was that expensive till this study.
The EIU study found that a 750ml bottle of table wine cost an average of USD$25 in Singapore. Comparatively, a similar bottle of wine costs about $12.50, $11.45 and $8.40 respectively in Tokyo, Paris & Geneva.
And this was even before the most recent increase in taxes for alcohol.
HARD FACTS we have to accept
Let’s be real, Singapore is not a cheap city (or country) to live in. We are small, overpopulated and have no natural resources to fall back on. Singaporeans need to accept that, and the logical ones do.
At the same time, there is no need for any politicians to try spin, disagree or back up statements with cherry picked statistics to deny the expensive nature of living in Singapore.
Look at the following…
- A $350,000 4-room public housing flat that takes about 20 years to repay. Check.
- Cars that are exorbitantly expensive, and tagged to COE prices which are more volatile than the stock market. Check.
- Daily expenses such as utility bills, handphone bills, lunch during work, food expenses at home, public transport bills, etc, that adds up to a high minimum cost of living in Singapore. This can easily be at least $500 per person in the family. Check.
- Other expensive ancillary costs such as clothes, education related expenses, medical care and insurances. Check.
We believe the EIU study is not entirely perfect (as with any study that has to rely on information surveyed worldwide). However it is still a good proxy to rely on as a gauge on how expensive Singapore has become. We should not just ignore it.
What are your views on this? Share with us your comments on our Facebook page.
Original photo by Benjamin Lim. Used with permission.