S'pore tops the one list it didn't want to
SINGAPORE has taken the top spot in an international study as the world's costliest city to live in.
According to the Economist Intelligence Unit's Worldwide Cost of Living 2014, the Republic leads Paris, which is the second costliest city, followed by Oslo (ranked 3rd), Zurich (4th) and Sydney (5th). Tokyo, which was the most expensive place last round, is tied at the sixth position with Caracas, Geneva and Melbourne.
The report noted that Singapore has been "steadily moving" up the rankings over the last decade, and was the 18th most expensive city 10 years ago. This is due to a 40 per cent appreciation in its currency over the last decade, coupled with "solid price inflation".
However, the bi-annual survey also said that some "structurally expensive items", such as costly cars due to high certificate of entitlement prices, have also skewed the overall cost of living upwards.
The expensive malls here make buying clothes a pricey affair, it said.
The study compares the cost of living in 140 cities by tracking more than 400 individual prices across 160 products and services like food, clothing, rentals, transport, private schools and domestic help.
While it is designed to help human resource and finance managers plan compensation for expatriates, Singapore's top ranking does affect the average Singaporean, said Mr Yeoh Lam Keong, an adjunct senior research fellow with the Institute of Policy Studies.
"Prices are tied to the scarcity of land in Singapore, which affects rentals, home ownership and transport," he said. "Singapore has been quite liberal for a long time about foreigners owning land and immigration has been excessive. Local real estate prices have been bid up."
He expects the rising cost of living to "moderate in the coming years", as property cooling measures and the benefits of the productivity drive kick in.
Mr George McFerran, Asia-Pacific managing director for eFinancialCareers, said that a number of financial services companies have moved their back-office operations or lower skilled roles to places like Malaysia, India and the Philippines. But sectors such as wealth management and private banking continue to grow.
Mr Michael Smith, Randstad's country director for Singapore, said the country's "regional connectivity, efficiency of Government and being English-speaking" ensure its appeal as a regional business hub.
Mr Mark Hall, vice-president and country general manager of Kelly Services, said companies have become more "cost conscious" over the past few years, rolling back traditional components in expat packages, like housing and schooling.