The Jewel waterfall Singapore CHangi airport

Is Singapore Really The World’s Most Expensive City?

In the global narrative of urban living, Singapore has etched its name as a shining example of economic prowess, technological advancement, and cultural diversity. However, one label that consistently accompanies this city-state is that of being the world’s most expensive city.

I’m not going to dispute the fact that it’s an expensive city to live in.

It is.

But is it really the most expensive city in the world?

I’ve lived in Singapore for some time now and have loved my time here. I love the tropical weather, the food, and its proximity to my favorite places in SE Asia like Bali and Koh Phangan. Singapore is an expensive country no doubt, but to call it the most expensive in the world is a bit too generalized. As someone that’s lived and traveled all over the world, the case can be made for and against this claim.

bali scooter rice field Jatiluwih ubud
Loving the Bali life. Just a quick two hour flight from Singapore.

Some things are very expensive in Singapore while others are much cheaper than comparable cities. You have to dig deeper into the question to really understand it which is exactly what I will do on this blog post!

Economist Intelligence Worldwide cost of living 2023

This blog post centers around the recent study by the EIU on the most expensive places in the world. It ranked Singapore as #1 amidst the usual suspects of cities like New York, Zurich, London, Sydney, etc.

The criteria they use are standardized with the same categories for each city. Here is the methodology they use to calculate these rankings:

It’s nothing fancy and they use standard topics like rent, food, drink, clothing, transportation, private schools, domestic help and other things. Everything is then converted to US Dollars which will also capture FX risk into the studies. Finally, everything is compared to a base city, New York City, which has an index score of 100.

The detailed report which you can download on their website only gives the score for each city but not the detailed breakdown of each component that goes into the score. Therefore, it’s impossible to actually compare what the study uses for things like rent, car prices etc.

This blog post will go into why I do not think Singapore is the most expensive city in the world.

Cost of Rent in Singapore

I’ve written in great detail about the cost of living in Singapore in previous posts and to summarize, it’s not a cheap place. For starters, let’s look at rent because this is easily the largest driver of anyone’s monthly budget.

Pinnacle duxton singapore apartment

No one moves to Singapore with the illusion that it’s going to be a cheap place to live. It simply isn’t. Rents post COVID have spiraled upwards out of control, alcohol is super expensive, restaurants are pricey, the price of schooling is insane, and anything else you can think of is probably also expensive.

I spend something like $7.2k SGD (~$5.5k USD) a month for a 3 bedroom apartment in the city center (it’s really more of a 2.5 bedroom apartment). While it does sit high up in a nice condo building, the apartment is still quite small especially for the price paid. You can find rents for cheaper than this but it won’t be by a lot if you want to live in the city center.

In comparison, an apartment in New York City in the center of the city will easily cost more than a similar unit in Singapore. A 1 bedroom apartment in Flatiron for example will easily cost $5,000 USD a month for something decent. A 2 bed 2 bath in a top neighborhood will go for $6,000+ and you won’t even find something that nice.

Eating Out In Singapore: A Tale of Two Cities

This next section is definitely the most variable of the cost of living categories in Singapore. Going out in Singapore is expensive. There is no doubt about it. Singapore is a work hard play hard city and because people make so much money in this country, going out is reciprocated.

singapore old airport road hawker center
Some stalls at Old airport road hawker center.

Depending on your lifestyle and interests, you could spend much less or much more than what I spend. I do think when you first move to Singapore, this number will be much higher as you explore your surroundings and are excited about your new home. As you settle in, you won’t go out as much and this number will stabilize.

Like many other people in Singapore, I exclusively eat out and barely cook anything on my own. While restaurants are on the pricier side, eating out at Singapore’s famous hawker markets is very cheap. A typical meal at a hawker stand will be somewhere between $4 and $6.

A chicken rice for example starts at $3.50 for a standard portion size. I’m a big guy so I typically get double or triple the meat which makes the total closer to $6-8 which is still very okay in my opinion. The beauty of the hawker markets is that there is so much variety that you’ll never get sick of it. You could spend a lifetime eating at Singapore’s hawker markets and still never eat everything.

Katong Chicken rice singapore

Restaurants on the other hand are much pricier. Expect to pay at least double the price of hawker market for simple Asian food but this still won’t break the bank. It’s mostly when you dine out at fancier Western style restaurants where the bill goes up. You can expect to pay closer to $35 for a simple cacio e pepe at a nice Italian restaurant which blows my mind since I had so much of this while traveling through Italy for nothing. But it’s all about novelty and what you don’t have in Singapore!

maxwell hawker center singapore

On a typical weekday, I’ll spend about $6-15 on a lunch depending on whether I’m feeling a hawker market or not. For dinner, I will spend $10-$20 on either hawker food or a take out type of meal. On the weekends, dinners out can easily be $100 per person and if you do this twice a week, this will get you to somewhere between $500 – $2,000 a month.

Every now and then, a dining experience at Lavo for their bottomless champagne brunch will set you back $200 a person which will blow out any monthly budget. Nevertheless, it is totally worth it and an amazing experience!

Lavo Brunch Singapore Marina Bay Sands

Driving a Car in Singapore is the most expensive in the world

If you don’t know, now you’ll know. Singapore is the most expensive country to own a car and it’s not even close. It’s something like 3-4x more expensive to own a car in Singapore than the next most expensive country. I’ve written in detail how much a car costs in Singapore so I won’t get into the calculation here but rather summarize it.

How much to own a car in Singapore?

To own a car in Singapore, you’re paying two additional taxes that you otherwise wouldn’t pay in almost any other country in the world. The first is called COE (Certificate of Entitlement) that grants you the right to even go and buy a car (this is not a drivers license). This certificate is traded on the open market based on supply and demand but generally hovers well over $100k SGD. Again, this is just a piece of paper; you have no car whatsoever yet.

In addition to the COE is the ARF (Additional Registration Fee). This is a traditional tax on the value of the car. The amount varies but follows a tiered structure depending on the value of the car. The minimum amount for the ARF is 100%, and goes up to 320% for car values over $80k SGD.

All in all, you’ll pay something like $200k for the cheapest and most basic of cars in Singapore. Want a simple BMW 3 series? You’re looking at something like $350k. Want a Porsche 911? Now you’re looking at $1.5m to $2m!

Do you need a car in Singapore?

For me the answer is a straight up no. There is really nothing you can do in Singapore that warrants needing a car.

I also talk about this in great detail in my do you need a car in Singapore post. The truth of the matter is there’s nothing you can really do with a car in Singapore that warrants paying such ridiculous prices. The city is quite small and is well connected by public transport. Public transportation is also very cheap with a single MRT ride costing around $2 SGD. In comparison, a train ride in the city of Zurich will be something like CHF4 ($6 SGD).

Taxis are also extremely affordable for the salaries you can get. It’s not uncommon that people can take taxis to work every day and still pay less than owning a car. A taxi ride from the city center to the airport will be about $20 SGD ($14 USD). A similar taxi ride in New York City can be $80-$100 USD and a taxi ride in Zurich will be CHF 60!

There’s also nowhere to really drive your car once you have it. Singapore is a tiny city that measures 30km by 20km. You have nowhere to except for Malaysia but you’re better off just flying to places like Kuala Lumpur or Penang.

Owning a car is a status symbol in Singapore

A car in Singapore is a status symbol that everyone still strives to attain to this day. It is a part of the original 5 Cs of Singaporean society: Car, Condo, Cash, Career, and Country Club. Singaporeans are wildly materialistic as with the rest of Asia so this just goes with the territory.

singapore kampong glam mosque

Thankfully, in more modern times, younger folks have started to shun the 5Cs in favor of more meaningful experiences but I suspect this will take a long time to change. Singaporeans have been convinced they need a car to succeed in the city even though there is no point to driving. With the astronomical cost of owning a car, this ensures people will work hard for a very long time for this purpose.

If people in Singapore just realized they don’t need a car, then it’s likely people will realize just how much more wealthy they actually are. Again, I’m not advocating that no one should drive a car in Singapore. If you have the money and you don’t need it for anything else, then go for it if you must. However, if you are stretching yourself thin and severely reducing your savings rate to buy a car because society tells you to!

Car ownership is the only reason why Singapore ranks so high

While Singapore is a very expensive city to live in, I don’t believe it is more expensive than other big cities in the world.

The cost of owning a car is the only reason why it ranks the highest. When you conduct these cost of living analyses, you need to keep your testing parameters the exact same so of course Singapore will stand out as the most expensive. However, as I’ve written above, no one needs a car in Singapore so basing your analysis off a luxury item is misleading.

Therefore, I really don’t think Singapore is the most expensive city at all.

Disposable income in Singapore is high

Singapore has in comparison higher salaries and lower taxes to its peers. The salaries at least in the finance space are on par with New York but taxes are much lower. What do you get in the end? A lot of disposable income.

While Singapore is an expensive city to live in, your disposable income makes up for it. As an example, someone making $200k SGD a year will pay roughly 11% in income tax. It’s surprisingly much easier to save money here than in other big cities. With this savings, you can either save it and contribute to retiring early like me, or you can use it to spend at shopping stores or travel.

I think that a lot of these studies miss out on the fact that Singaporean income taxes are so low and what that can actually mean for you.

Cost of childcare is super high

The savings on tax argument all goes out the door if you have children. As a foreigner, you must pay for your children to be educated at private institutions. You are not aloud to attend local schools as a non citizen or PR and therefore you only options are to pay for international schools.

These schools can run upwards of $40-50k a year per child. If you have two kids, that’s $80-$100k a year post tax! Any money you save on tax will essentially go towards childcare. There’s a reason the taxes are low after all!

In Conclusion

To summarize, I think Singapore is an expensive city but it is not the most expensive city. I firmly believe New York City is a more expensive city to live in by all measures. Zurich is also very expensive but the low taxes and lower rent prices make it more affordable in my opinion.

The only reason Singapore ranks as the highest on the EIU list is because of the cost of car ownership. As I’ve already written, you don’t need a car in Singapore just like you don’t need a car in New York or Zurich. In fact, I didn’t know a single person in New York that had a car nor did I know anyone that cared to own one.

Singapore is a different animal because people are brainwashed into thinking they need a car and thereby spending huge portions of their income on something they don’t need. If you take a car out of the equation, Singapore can be a much more affordable place to live than in New York or Zurich. The local food and entertainment options mean you can easily spend way less than a similar experience in other cities.

Best of all? If you ever feel like Singapore is too expensive and/or just need a break from the tiny island-nation, simply book a flight to one of the many different countries surrounding Singapore. When you arrive, you’ll be the king of kings because it will be magnitudes cheaper than Singapore.