Complete Property Market Updates of Singapore

August 7, 2008

Cost of living up for expats in Singapore

Filed under: General,Singapore Economy — Propertymarketupdates @ 3:56 am

Republic up 17 places in global ranking due to higher inflation and stronger Singdollar

SINGAPORE has become a more expensive place for expatriates to live, but it is still cheaper than Hong Kong, even though the gap is closing with its long-time rival.

The Republic jumped 17 places to land at the 114th spot in a global survey of the costliest cities for expatriates, because of higher inflation and a stronger Singdollar in the past year.


FEELING THE PINCH: The purchasing power of expats living in Singapore has been dented by higher costs such as rents, fuel and food. — ST FILE PHOTO

Singapore closed the gap with pricier cities such as Hong Kong, which fell in the rankings to the 97th spot, in the survey conducted by human resources firm ECA International.

Within Asia, Singapore actually fell from the ninth spot six months ago to the 13th spot, partly because the cost of living in some Japanese cities had risen rapidly due to the stronger yen.

The purchasing power of expats living in Singapore has been dented by higher costs such as rents, fuel and food, as well as a stronger Singdollar.

 According to ECA’s data, the cost of fuel rose by more than 13 per cent in the last six months, while the price of foodstuffs such as egg noodles soared by almost 15 per cent.

Inflation in Singapore is now at a 26-year high, after accelerating at a faster-than-expected rate of 7.5 per cent in April.

This prompted the Government to raise its inflation forecast to between 5 per cent and 6 per cent, up from the 4.5 per cent to 5.5 per cent range.

Yesterday, the Singdollar fell to about 1.374 against the greenback, but analysts expect it to gain further this year as the Government seeks to rein in inflation.

Mr Scott Colman, 38, an executive in an American technology company, said he felt the greatest pinch from rising rents and petrol prices, as well as the strengthening Singdollar because his compensation package is partly paid in US dollars.

Mr Lee Quane, the general manager of ECA International Hong Kong, said Singapore’s rising cost of living has prompted global companies to adjust their expat employees’ pay and allowances.

He added that the gap between Singapore’s cost of living allowance for expats and that of Hong Kong has shrunk dramatically from about 20 per cent five years ago to less than 5 per cent today.

Still, he said Singapore remained a cheaper place for expats than Hong Kong or Shanghai, and global companies were not considering relocating their staff from the Republic to the Chinese cities.

Top spot in the global ranking went to the African city of Luanda in Angola, where some expat consumer items are hard to get and command top dollar.

The survey compares a basket of 128 consumer goods and services such as groceries, clothing and electrical goods that are commonly purchased by expats in more than 300 locations worldwide.

Multinational firms use the results to help determine how much to pay their staff who work overseas.

Ms Kate Bryce, a finance professional in her 40s, said her company recently reviewed her allowance and raised it by about 10 per cent.

‘I’m hoping that the Singapore dollar doesn’t strengthen further because I doubt I would get another revision in the next year. Most companies are tightening their belts as the global economy slows down.’

STILL CHEAPER

The gap between Singapore’s cost of living allowance for expats and that of Hong Kong has shrunk dramatically from about 20 per cent five years ago to less than 5 per cent today. Still, the Republic remains a cheaper place for expats than Hong Kong or Shanghai, says Mr Lee Quane, general manager of ECA International Hong Kong.

Source : Straits Times – 12 Jun 2008

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