This story has been updated from its original version, which was published at 3:51 P.M. SGT.
Singapore kept its crown as the world’s most expensive city for the fifth straight year in the Economist Intelligence Unit’s (EIU) annual Worldwide Cost of Living survey, but it’s a claim that should likely be taken with a shaker of salt.
For one, much of the ranking appears to rely on costs that simply don’t apply to most people living in Singapore.
“[Singapore] remains the most expensive place in the world to buy and run a car and the third-priciest destination in which to buy clothes,” the report released this week said.
The cost of buying a car is certainly high: Earlier this month, the latest bidding for a certificate of entitlement (COE), which is merely permission to own a car for 10 years, not a car itself, came in at just under S$40,000 (US$30,460) for both smaller and larger cars, according to a Straits Times report. Cars tend to be more expensive, in part because of higher land costs for dealerships and because of the smaller volume sold in the city-state.
But even so, that may not figure much into the average Singapore resident’s calculations, because owning a car is a luxury for most of the population.
‘Where the rich use public transportation’
Gustavo Petro, a Colombian politician, famously once said, “A developed country is not a place where the poor have cars. It’s where the rich use public transportation.”
Singapore is a developed country.
Despite some recent grumbles about maintenance issues on the subway line, called the MRT, Singapore’s public transportation system is widely used and reliable. And residents’ ability and desire to use car sharing services, such as Uber and Grab, — which have become so popular that the taxi companies and ride-hailing companies are poaching each other’s drivers to deal with a driver shortage — may have made owning a car even less necessary.
This year’s EIU report didn’t provide a breakdown of the clothing costs. The EIU didn’t immediately respond to Shenton Wire’s email seeking more details.
How much for that dress?
But back in 2016, the report claimed that Singapore’s average price for a ready-to-wear, mid-priced daytime woman’s dress was US$552.80. Presumably, EIU wasn’t shopping at H&M or Uniqlo. But depending on the fabric used, even the average tailor in the city-state was unlikely to charge that much for a made-to-measure women’s dress.
Among the prices the EIU provided this year, the average U.S. dollar price of a loaf of bread in Singapore was US$3.71, but that was the lowest among the top-10 most expensive cities, with the most expensive Geneva at US$6.45 followed by Paris at US$6.33. The average cost of a bottle of table wine was US$23.68, the second-most expensive among the top-10; No.1 was Tel Aviv at US$28.77; in Geneva, it was the cheapest at US$8.37.
The EIU did note that Singapore offered “relative value” in some categories, such as personal care, household goods and domestic help, especially when compared with regional peers.
Property and technology investor Alexander Karolik Shlaen, an economist and CEO of Panache Management, a luxury brands and investment adviser, pointed to Singapore’s housing market as a reason that the city-state shouldn’t be considered expensive.
Home is where the biggest expense is
“In Hong Kong, the properties are some three times the price of Singapore, if one buys the property, which means if expats rent, it is also three times the price or more,” he said on Friday. “I find Singapore significantly cheaper than Hong Kong as after all, the biggest expense is on property or rent.”
Shlaen also noted that the quality of housing in Singapore tended to be better, keeping the price range constant. The EIU ranked Hong Kong as the world’s fourth-most expensive city this year.
Shlaen said that he wasn’t concerned about Singapore’s “most expensive car on earth” ranking.
“The usual two cars per family or even one car is not entirely needed as the transport is very cheap. And that includes cabs, which are much cheaper in Singapore than in say, Tokyo or London,” he added. Until 2013, the EIU ranked Tokyo as the world’s most expensive city.
A similar dynamic with autos may be in play with a new entrant to the EIU’s top-10 most expensive list: Tel Aviv, which climbed from 34 just five years ago to hit No.9 this year.
“Currency appreciation played a part in this rise, but Tel Aviv also has some specific costs that drive up prices, notably those of buying, insuring and maintaining a car, which push transport costs 79 percent above New York prices,” the report said.
Why cheap is bad
To be sure, getting ranked with expensive cities isn’t all bad.
The cheapest city in the world, according to the EIU, was war-torn Damascus, Syria, while the next-to-last was deeply troubled Caracas, Venezuela.
“Instability is becoming an increasingly prominent factor in lowering the relative cost of living of a location. This means that there is a considerable element of risk in some of the world’s cheapest cities,” the report said. “There is some correlation between The Economist Intelligence Unit’s cost of living ranking and its sister ranking, the liveability survey. Put simply, cheaper cities also tend to be less liveable.”