Is Singapore becoming a very expensive place to live in?

There has been a lot of debate on the Economist’s survey that listed Singapore as the most expensive city for an expat to live in. However, most of the debate seemed to focus on the items included in the list of goods consumed, and the fact this is meant as an indicator for expats living abroad.

I’m dismayed to see nobody questioning the fact that Singapore has risen in ranking so quickly over the last few years. This is basically an index like CPI, which is tracking the change over time. Henceforth, a more relevant question would be – Why is prices in Singapore increasing faster in comparison with other global cities over this time period?

Many Singaporeans have been complaining about rising costs of living in the last few years. What’s more disturbing is the rate of increase which seems to be rising faster in the last 5 years compared to 1 or 2 decades ago.

Property prices have increased at an accelerating rate in the past few years, so much so an asset bubble is forming and the government has to introduce numerous measures to cool the property market. This isn’t limited to residential properties, but also commercial properties.

Look at the coffee shops that were sold for millions of dollars, and these are located in the heartlands, not in the CBD prime district. Isn’t this an indicator of higher rentals to come, leading to higher prices for food items sold in the shop? We are now talking about daily kopi-o and teh-si, a common person’s daily staple, not a luxury item.

Can you imagine paying $6 for a bowl of fish-ball noodles at the coffee shop in an HDB neighbourhood? Sound ridiculous?

Labour cost has been always highlighted as a major cost contributor that needs to be kept in check. How much does the labour cost contribute to the total operation costs of business? 50% or more?

What does the business intend to do to deal with the other 50% or the majority of operation costs? What are the major contributors? How much is rental or facility costs?

It’s very disconcerting and disheartening to see so much debate has focused on the validity of the Economist’s survey, and so little attention paid to the crux of the issue – cost of living rising at a faster rate recently.