In Singapore, we do whatever it takes to be the first in everything. It doesn’t matter if we have to drive like Mad Max just to beat the car in front of us to the PIE exit, or if we have to charge like a lion bringing down a gazelle just to sit on the only MRT train seat available – we must be first!
As of today, we can now proudly proclaim that we are indeed first. That’s right! We have just won the gold medal when it comes to being the most expensive city in the world, beating out cities like Paris, Oslo, Zurich, and Sydney to claim this year’s #1 spot.
So for those of you who have been lamenting for years that the cost of living in Singapore is becoming increasingly unaffordable – congratulations, you now have more proof to back up your claims.
What You Need to Know About the Economist Intelligence Unit (EIU) Survey
The news that we’re #1 comes directly from the Economist Intelligence Unit’s (EIU) Worldwide Cost of Living Survey 2014. It’s a bi-annual survey that compares the actual cost (not “recommended” retail cost) of more than 400 items across 160 products and services including housing and transportation. This survey isn’t just some one-off report either – the EIU has been conducting this survey for over 30 years.
The whole purpose of the survey is to give HR managers, VPs, and CEOs an idea of what the cost of living would be like in any of the 130 cities around the world compared to New York, which is the baseline for this survey. That way, they can calculate the cost of living allowance for employees that are relocating to any of these destinations.
Singapore Has Been Steadily Moving Up the Ranks
Singapore’s ascent to the #1 spot on the EIU’s Worldwide Cost of Living Survey 2014 didn’t happen overnight. It’s really a story of persistence – going from #18 just a decade ago according to the survey, to taking the top spot this year.
What’s even more interesting is Singapore’s rise in the EIU survey rankings over the last four years:
- 2014 Ranking – #1
- 2013 Ranking – #6
- 2012 Ranking – # 9
- 2011 Ranking – # 10
But what directly contributed to Singapore’s rise in the rankings? According to the EIU survey, these factors contributed to Singapore’s rise to the top of the list:
- Stronger Singapore Dollar: The value of the Singapore dollar has risen by about 40% in the last 10 years.
- Price Inflation: The rate of inflation in Singapore since 2008 has averaged about 4%, pushing up the cost of goods and services, especially on luxury goods and clothing. Bear in mind this doesn’t even take into account the two biggies: private housing and private transport.
- Expensive Transportation: Rising Certification of Entitlement (COE) prices (especially since 2010) and the Additional Registration Fee (ARF) among other taxes makes the cost of transportation about three times higher than New York according to the survey.
- Few Natural Resources: Singapore’s lack of resources means that it has to extensively import everything from energy and water, to construction materials, leading to high utility costs.
What Does This Ranking Mean For Singaporeans?
The fact that a globally recognized survey measuring the “actual” cost of life’s necessities ranks Singapore as the most expensive city should be a wakeup call to everyone. The truth of the matter is this – life in Singapore will never get any cheaper.
Think about it, Singapore has been in the top 20 on this list for the last years! Why is that? Because Singapore’s high prices are maintained by the scarcity of resources, land, and the infrastructure to support motor vehicles for the average citizen.
The biggest takeaway you can get from this news is to prepare today for a future that will be even more expensive than it is today. That means taking a more proactive approach to retirement that includes maximizing your CPF Special Account (SA), investing wisely, and avoiding many of the dangerous retirement “myths” that many Singaporeans follow. Stay up to date with us on Facebook as we continue to explore ways in which we can all survive in this crazy (expensive) city.
What are your thoughts on being “first” in the world? Share them with us here!