A recent BBC article on Singapore Cost of Living raises a really good point about the cost of living in Singapore. The point is, it depends on whether you need to buy a car and consume “like an expat.”
This article exposes the irrelevance of the “most expensive” lists.
If your MNC’s regional HQ is in Singapore, you will not send your expats to another city, say, Hong Kong or Shanghai, because you read that Singapore is ranked the most expensive. You send them to Singapore since that is where your office is, probably due to low taxes, high quality of living and rule of law. Location of your offices or your customers drives where you send your managers, not news about cost of living rankings.
For your foreign talent on local contracts (locally hired foreigners, international hires, permanent transfers or localised expats), “real” cost of living matters. But the people who create COL indexes (and generate these lists 2x/year) are generally in the business of selling this information (COL indices or per diem numbers) to companies that are sending true expats on Long term assignments (LTAs) or short term assignments (STAs), respectively. But to the growing number of foreigners on local contracts, the cost of housing near Orchard Road, or the cost of cars is irrelevant, since anyone seriously looking at living in Singapore (or anywhere) would have researched the “real” cost of living locally, using PropertyGuru and by exploring the various food centres. Sure, they will use the data on “most expensive” to negotiate, but they have already discovered secretly that it is quite affordable.
I have lived in Singapore nearly 10 years, after living in the U.S. most of my life. I find Singapore to be very affordable. I can walk to Adam Food Centre and have dinner with my wife for less than $20 (about $14 USD), including the large bottle of Tiger beer. I have a credit card that includes EZ-Link auto-top up so I have nearly free transportation using train, bus and taxi.
I don’t really take these articles seriously anymore. Corporate HR depts do not pay any attention to them, in my experience. Only the expats, or those wanting to be paid like an expat, use these articles for leverage.
If you are in HR, ignore the “most expensive city” lists – they are not about every day local costs, but focus on expat-related costs, for the shrinking number of expats whose companies still believe the expat is worth 2-3 times local talent, since that is the cost ratio, typically.
Here’s a Study by NUS that is more helpful, as it exposes the huge difference between expat and local costs of living. Singapore is ranked #48 for ordinary people.
Ignore the “most expensive” articles. They answer a question no real person is asking. Instead, go have dinner at your local food centre, raise a Tiger and enjoy complaining about the best place you’ll ever find to live.
(special thanks to my friend Mack Moey of SNEF for inspiring this blog!)