Why is Singapore so Expensive?

Singapore has been ranked as the world’s most expensive city for the 5^th consecutive year, based on the Economist Intelligence Unit’s terms on the Worldwide Cost of Living 2018. For a city that is also one of the most attractive places to live, thereby attracting huge inflow of human as well as financial capital, it shouldn’t come as a surprise that prices will definitely increase. Especially when there are more and more people demanding the very same goods, and there is also more money to purchase them.

Though the EIU’s ranking was based on a thorough survey and comparisons between different individual prices of products such as food, clothing, home rents, personal care items, utility bills, recreational costs and transport, it is still subject to certain limitations. This is because most of the prices used by the EIU reflects those of premium goods, but on a closer look at the middle-range products, you will find that they are not as expensive, with some even lower priced than the WCOL’s minimum values.

High Accommodation Costs

Accommodation costs remain the highest indicator of the expensive living costs in the Lion City.  There are several options ranging from Condominiums, Serviced Apartments, HDB flats, Landed property, Room rentals to private apartments. Condos are highly priced considering the availability of certain recreational facilities such as tennis courts, swimming pools, and playgrounds for children, as well as their locations. Rental costs for a 3-bedroom condo, depending on its location ranges from S$3,300 to S$5,000 for rural neighborhoods, and can be as high as S$8,300 to S$15,000 per month in prime regions. HDB flats are however budget friendly, thus patronized by over 80 percent of the natives. A typical 3-bedroom HDB unit can cost about S$3000 per month to rent or may range from S$2,200 to S$2,700 in sub-urban areas.

Food Costs

As with many other countries, food expenses vary based on the lifestyle of the individual. If you decide to prepare your own food, you could be spending an average amount of S$200 per head per month, whereas, eating out consistently could incur a monthly average of about S$1,000 to S$1,200. On the contrary, food in Singapore is affordable thanks to the numerous food courts and hawker centers sprawling with dishes. An average cost for lunch can be at a low cost of S$4 at a hawker center, S$5 to S$6 at a food court or between S$20 to S$40 per head at a restaurant.

Driving in your own car is expensive

Driving around in your private car can be a very expensive venture due to the heavy taxes placed on this particular transportation mode. In order to reduce the level of congestion, and create an environment free of air pollution, the Singaporean government uses these measures to discourage people from using their private cars, while encouraging them to patronize the public transport which is extremely efficient and affordable.

To purchase a car in Singapore, you will have to bid for a Certificate of Entitlement which can hit as high as S$78,189. Aside that, you will be charged a 7% goods and services tax, S$140 registration fees, 20% excise duty among others. Petrol priced in liters can cost about S$2.52, plus parking charge of about S$2 per hour. Cumulatively, owning a brand new automobile, say an European or Japanese model can cost about S$150,000. Comparing the high cost of owning a private vehicle to the average S$150 monthly cost you can spend on a bus or Mass Rapid transit system and its equally excellent services, it will be best to opt for the latter.

Education is expensive

In view of the high standards of Education in Singapore, it is not surprising that it may be expensive in comparison to other parts of the world. Both choices whether government schools, also known as local public schools and private or international schools are great for equipping your child with the world-class knowledge he needs. With regards to cost, however, international schools happen to be more expensive. They can cost an average of S$1,000 to S$3000 a month, while Government schools are more affordable with the highest being S$552 to S$772.

Conclusion

Clearly, Singapore is not a cheap country to live in; there is always a ready market of premium products and services for as much as you wish to spend. However, at the same time, you can afford to live comfortably if you decide to be a bit frugal.