Singapore Rises To 14th Spot In Ranking Of Costliest Expat Cities

Source: The Straits Times, 19 June 2007

Fast-rising housing costs have pushed Singapore three places up to 14th spot in an annual global survey of the cost of living for expatriate workers.

This places the Republic’s cost of living for expats over that of New York, Beijing and Istanbul in the survey of global cities.

Moscow is the most expensive city for expats for the second straight year, ahead of London and the Asian trio of Seoul, Tokyo and Hong Kong.

The survey - which covers 143 cities and measures the cost of 200 items in each location, including transport, food and entertainment - is used to help multinational firms determine compensation allowances for their expatriate staff.

The rise in Singapore’s ranking has prompted concerns among human resource consultants that the cost of hiring expats here is higher.

But the survey, conducted by Mercer Human Resource, also found that despite recent hikes, rents in Singapore are still relatively low.

Mercer figures showed that the rent of an upmarket two- bedroom unfurnished apartment costs US$2,946 a month here (S$4,530), compared with US$7,038 in Hong Kong and US$3,485 in Shanghai.

According to Mr David Leong, managing director of recruitment firm People Worldwide Consulting, the overall cost of living here is still comparably low given Singapore’s infrastructural efficiency and social stability.

Mercer said the ’sharp increases in house prices’ and the knock-on effect on rentals was the main reason for the jump.

Indeed, human resource consultants said expats here have been badly hit after rentals here rose 25 per cent to 35 per cent in the last 12 months.

Mercer Human Resource Consulting director Mr Fermin Diez said some of his multinational clients are concerned that the rise in housing costs will affect bottom-lines.

Rental cost is about 25 per cent of the total cost of an expat. So with rental costs going up by 25 per cent to 35 per cent, the total cost of an expat can rise 4 per cent to 9 per cent, Mr Diez said.

He cited an example of a firm with 120 expats here whose overall cost rose by over $1 million.

Some companies have offered to cover their expats’ rent rises, Mr Diez said, and more firms will do so in the coming months as their expats renew their rental contracts.

But expats on local packages may experience a difficult time if there is a need to downgrade to lower rental properties, said Ms Rosa Goh, country manager of Manpower Singapore.

Australian Matthew Shaw, a business consultant who has worked here for six years, said housing allowances have not kept pace with rentals.

He said one of his associates had her housing allowance upped from $3,500 to $4,000 and had to pay $500 out of her own pocket after her landlord raised the rent to $4,500 a month.