Expats looking for a move to Singapore face rising costs
By Kevin Varley and Ailing Tan
(Bloomberg) — As some expats in Asia increasingly look to Singapore as a financial center destination - due in part to Hong Kong’s ongoing Covid restrictions - costs are rising in the tropical city-state.
Though moving down one notch to second place in a global ranking of the world’s most expensive cities last year, Singapore remained the most expensive hub in Asia, with Hong Kong placed fifth globally and Dubai seventy-fourth.
Inflation in Singapore rose to a 9-year high in February, well ahead of rival Dubai’s latest reading of about 1%. Here’s what to expect on key items:
Rents, which typically eat up the largest portion of an expat’s paycheck, jumped to a seven-year high in the Lion City, with analysts anticipating further increases as demand outweighs supply.
In contrast, rents had fallen in Dubai for nearly five straight years before increasing 0.3% in February, while Hong Kong’s rents have now risen for seven consecutive months after falling for 19 straight months between 2019 to 2021.
The residential market may pose a challenge for incoming expats, but it also depends on the package that they are offered, said Christine Sun, a senior vice president of research & analytics at OrangeTee & Tie. “For expats who are affected by the rental costs, they may try to rent smaller units or move further away from the city center.”
Rising home prices prompted Singapore’s government to place curbs on foreigners buying private property last year.
Rising commodity prices have pushed transportation costs higher, with Dubai seeing the largest yearly increase of around 20%, followed by 15% in Singapore and 7% in Hong Kong, according to the latest available data compiled by Bloomberg News.
In Singapore, if you want to buy a car, prices are also driven up by the cost of the city’s certificate of entitlement, the first step to having one for 10 years. The price of obtaining a COE recently hit a record of US$74k and the city has announced higher taxes on luxury cars.
Singapore’s international schools also cost more, with median annual school fees of US$21,000 last year, much higher than both Hong Kong and Dubai, according to International Schools Database.
Dubai’s private schools will freeze education costs for the academic year ending 2023, while Hong Kong’s private and international school fees rose on average 3.9% in 2021-2022.
Still, Singapore’s facilities, small size and tropical lifestyle may remain attractive to expats headed to Asia. The latest Global Financial Centres Index put the city-state on the top three for business environment and human capital metrics.
“Singapore is still the first choice for those who can afford it,” said Jennifer Gargiulo, a book writer of Diary of An Expat in Singapore. And those “who very much hope for a return to the life they led before the pandemic.”
© 2022 Bloomberg L.P.