The China Post
Singapore is becoming an increasingly expensive place for expatriates to live in, and it is to get even costlier, thanks to persistent inflation and a strong Singapore dollar.
In its latest survey, international human resource consultancy ECA International found Singapore to be the eighth-most expensive city in Asia for expats — compared with last year’s No. 9 placing. Globally, it is the 42nd-most pricey — up from 79th last year.
In Asia, Singapore is behind the likes of Japan, Hong Kong, Beijing, Shanghai and Seoul.
Looking to next year, ECA said that inflation and a strong currency will continue to drive expats’ costs in Singapore ever higher.
ECA regional director for Asia Lee Quane said inflationary wage pressure could see Singapore losing much of the comparative advantage it used to enjoy, as wages recover faster here than in the United States, Western Europe and Australia.
“The Singapore dollar has strengthened against the U.S. dollar over the past six months, and will be a big factor in contributing to Singapore’s cost of living. If it remains strong, the cost of bringing expats here will get more expensive — especially compared with Singapore’s natural competitor, Hong Kong,” he said.
He pointed out that three years ago, expat wages in Singapore were 15 percent lower than those in Hong Kong. Now, they are only 2 percent less.
Still, ECA’s survey highlights that Singapore remains one of the top expat destinations for companies. Globally, it comes in fourth, behind the U.S., Britain and China, but ahead of Hong Kong. Among companies headquartered in Asia, it is the third-most popular location — behind China and the U.S.
Quane said: “Given Singapore’s size relative to economies like the U.S. and China, it is interesting that it is managing to attract such a large number of international signees.”
Factors posing a challenge to companies when relocating their staff include the career opportunities of the employee’s spouse, children’s education, career setbacks and unpopular locations.
Compared with last year, when the number of companies expecting to increase international assignments stagnated at about 40 percent globally, companies this year have become more bullish in hiring expats, with 54 percent indicating an increase. This figure is still low, however, compared with the figure of 67 percent before the 2008 recession.
ECA expects Singapore to overtake its Asian counterparts soon. Said ECA managing director Ian Ridgwell: “Singapore is now more expensive for expats to live in than many European cities like Rome and Munich. It’s neck-and-neck with London.”
However, he added: “A lot of countries are now tightening their expat laws. If Singapore does not tighten them too much, it can still pick the best talent.”
ECA runs its survey every six months in over 400 places, comparing expats’ everyday expenses, excluding the house and car.