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S'pore is world's 6th most costly city, survey shows
Publication Date : 05-02-2013
Singapore has been ranked the sixth most expensive city in the world, a survey by the business intelligence arm of the Economist magazine showed.
According to the Worldwide Cost of Living 2013 survey conducted by the Economist Intelligence Unit, Singapore is 35 per cent more expensive to live in than New York.
Singapore has moved up three places from last year's ninth position, ranking it above cities such as Zurich, Paris and Geneva.
The survey compares the cost of living among 131 cities worldwide, using New York as a base city.
Carried out twice yearly, the survey compares more than 400 individual prices across 160 products and services. These include food, drinks, clothing, home rents, transport, utility bills and recreational costs.
Tokyo topped the list this year as the most expensive city to live in, as it has almost every year for the past two decades.
In contrast, the Pakistani city of Karachi was at the bottom of the list and ranked as the cheapest city surveyed.
The survey findings also showed that the relative cost of living in Asian hubs, such as Singapore and Hong Kong, has risen.
This is largely due to rising wages and growth in the region.
Barclays Capital economist Leong Wai Ho said the cost of living here is likely to stay high for the foreseeable future.
"Singapore is not going to become cheaper by any measure as a place to live," he said.
"The question is: Will cost of living increase at a pace that reflects growth in per capita income, and are we growing at the same rate as other Asian cities? The answers are not yet clear."
OCBC economist Selena Ling said the main contributors have been asset inflation on the housing and transport fronts, as well as a tight labour market, leading to higher wage costs.
Ling added that many of the cities on the list are high cost places within a country, unlike Singapore, which is a city state.
"There is no cheaper rural area people can decamp to, no economic hinterland," she said.
P.K. Basu, managing director and regional head of research and economics at Maybank Kim Eng, said the appreciation of the Singdollar against the US dollar and most other major currencies has also contributed to the higher relative cost of living.
Associate Professor Tan Khee Giap, co-director of the Asia Competitiveness Institute at the Lee Kuan Yew School of Public Policy, said the survey, which is targeted mainly at human resource managers and expatriate executives, should not be used as a benchmark for the lives of average Singaporeans.
"The high cost of living for expatriate executives in Singapore is due to private transport, rentals, alcohol, cigarettes and petrol, which is hardly surprising and not helped by rising property prices and higher COEs," he said.