A recent study by the Economist Intelligence Unit had ranked Singapore as the most expensive city for expatriates — an outcome that is partly due to the stronger Singapore dollar.
After tracking global prices of several goods and services, Sanjeev Sanyal, a Deutsche Bank strategist based in Singapore, said that the exchange rate has made Singapore more expensive in US dollar terms.
However, a lot also depends on lifestyle choices.
He said: “There is a real problem with ranking Singapore — we found that Singapore has a very high variation depending on which basket we choose.
“If you are taking a basket of goods which doesn’t include cars, then Singapore is actually quite affordable. On the other hand, if you take a basket which includes cars or even buying non-HDB real estate, then Singapore very quickly becomes one of the most expensive places in the world to live in.”
For example, the report found that a new Volkswagen Golf costs five times more in Singapore — at about US$126,500, compared to just over US$23,000 in New York. It is also far more expensive compared to cities like Hong Kong, Paris and London.
Alcohol is also more costly in Singapore, with a pint of beer going for nearly US$8 — compared to about US$5 in Tokyo and just over US$7 in Hong Kong.
However, other goods are cheaper in Singapore. For example, a two-litre bottle of Coca Cola is priced at US$2.25 — cheaper than London, Tokyo, Paris and New York, but more expensive than in Hong Kong and Shanghai.
Meanwhile, an iPhone 5S also costs less in Singapore compared to the UK, China and France.
Deutsche Bank said government subsidies also help to keep cost down.
Mr Sanyal added: “There is, of course. the pricing of HDB housing… much cheaper schooling for locals, public transport as well. There are several other things that are surprisingly affordable.”
The survey found that the minimum fare on public transport in Singapore (US$0.61) is comparable to that of Hong Kong (US$0.64), and a whole lot cheaper than several major cities.
Deutsche Bank said business school tuition fees for full-time MBA courses are also relatively more affordable in Singapore.
For instance, NUS School of Business charges US$41,200 — substantially lower than business schools in New York, London, Shanghai, France and Hong Kong.
Overall, the study found that among developed countries, Australia is the most expensive, with the US being the cheapest. Among developing countries, Deutsche Bank said Brazil remains very expensive while India is the cheapest.