Affordability crisis? How expensive has Singapore truly become?

Affordability crisis? How expensive has Singapore truly become?
PHOTO: ValueChampion

Singapore is widely recognised as an expensive place to live. In this study, we've examined the cost of living in Singapore across several key categories in order to understand how the city has changed in terms of affordability.

Even in Singapore and other countries with strong economies, affordability of goods and services is often a major concern. In some instances, the cost of living can become unbearable in booming cities. On the surface, the cost of living has not increased dramatically in Singapore. In fact, the core inflation rate in Singapore has averaged a reasonable 1.7 per cent since 1990 and has been very stable except during years around the financial crisis.

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That being said, there is more to this story than meets the eye. For example, some parts of life in Singapore have become increasingly expensive while others are still relatively affordable.


Inflation has been relatively low (1.7 per cent annualised average) in Singapore over the past few decades.

However, the cost of higher education has skyrocketed, with an overall increase of 16.65 per cent in the past 5 years.

Also, some food staples have increased dramatically. For example, the cost of bananas increased by 75 per cent from 2007 to 2017.

The cost of healthcare has also steadily increased ahead of CPI: 7 per cent since 2009.

On the flipside, transportation prices have remained steady, while housing prices have declined.


Those experiencing Singapore's high cost of living first-hand are probably well aware that some aspects of their lives have become increasingly expensive over the years. They may even feel vindicated by learning that the data confirms their suspicions.

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The cost of obtaining an education in Singapore has rapidly become more expensive than in previous years. For example, data from the Singapore Department of Statistics suggests that the increase in tuition has outpaced core inflation by about 7 per cent in the past 5 years.

While fees for primary schools have remained somewhat stable and tuition for secondary schools and junior colleges have increased only moderately, the cost of polytechnics and local universities have become particularly expensive.

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For example, tuition fees for Singaporean Citizens at polytechnics grew 15 per cent faster than core inflation from 2013 to 2018, despite the government's subsidies for these programmes.

Additionally, tuition prices at universities rose. For instance, tuition for programmes such as SUTD and Yale-NUS increased much faster than inflation, at 10 per cent and 27 per cent respectively. Even NUS and NTU saw tuition increases of 7.2 per cent, which was faster than core inflation of 6.6 per cent.

These trends indicate a significant increase in cost of attaining a degree for some students, given the already high price tag of attending university.

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However, the cost of textbooks has increased more modestly by about 4 per cent during the same time period.

Additionally, the rapid inflation of university tuition is a global trend; in fact, Singapore's education inflation is less severe than in other countries. For example, university tuition increased by an annual average of 4.3 per cent in the United States from 2008 to 2017, compared to 2.8 per cent in Singapore, according to data published by the US Bureau of Labor Statistics and Singapore Department of Statistics.

That being said, this provides little comfort to those students and their families that are currently struggling to pay increasing tuition costs or make student loan payments.


Food has also become more expensive in Singapore. Overall, the price of food has increased approximately 7 per cent faster than inflation over the past 10 years according to data from the Singapore Department of Statistics. For example, essentials such as rice, bananas and potatoes have become at least 60 per cent more expensive since 2007, compared to 37 per cent for general food price index.

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Not only that, cost of other foods, such as meat, sea food, and kale have almost doubled in the past decade.

Additionally, the price of food services, including restaurants, fast food, hawker food and caterers has increased about 6 per cent faster than core inflation over the past 10 years, making dining out more expensive for Singaporeans.

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Healthcare has also become increasingly expensive for Singaporeans. For example, data from the Singapore Department of Statistics indicates that healthcare inflation has outpaced overall inflation by about 9.5 per cent over the past 5 years.

Furthermore, the cost of medical visits and treatments have increase by approximately 8 per cent and 9 per cent since 2015, respectively.

Once again, while these rates may seem high, they are actually not as high as healthcare inflation in the United States, which was about 13 per cent over the past 5 years.

Still, these figures do indicate that Singapore is becoming an expensive place for those that require regular healthcare visits and treatment.

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While education, food and healthcare have clearly become more expensive for Singaporeans, these rising costs have been offset by other spending categories that have decreased or remained stable.

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Housing is typically the one of the largest expenses for most consumers, which makes housing affordability a major concern for both families and policy makers.

Housing prices in Singapore have mostly increased in recent decades; however, they have actually flattened in the past few years. Rental prices have also decreased by about 15 per cent in the past 5 years according to data from SRX Property.

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There are many factors that could help to explain these trends. First, there as been an increase in the number of HDB flats constructed following a lull in the mid-2000s. This increase in housing supply has likely moderated prices in recent years.

Additionally, HDB resale prices may have been deflated by concerns about the impending conclusion of 99-year leases. For example, individuals seeking to sell their aging property may need to accept lower resale values.

Finally, Singapore's government's property market cooling measures are likely to have decreased the increase in all types of residential properties.

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Despite the trend of declining home and rental prices, Singapore is still a relatively expensive place to live. For example, some neighborhoods in the city are simply not affordable for individuals with modest incomes.

Additionally, some neighborhoods have become more expensive for renters. For instance, the median rent for 4-room HDB flats in Marine Parade and Punggol has increased by approximately 2.5 per cent in the past year.

Still, even homes near the Central Business District (CBD) are typically less expensive than those of other major cities around the world.


Besides housing, public transportation has also become approximately 5 per cent cheaper in Singapore since 2015, according to inflation data from the Singapore Department of Statistics. Over the same period of time, taxi fares have increased by just 0.7 per cent, which was likely influenced by competition introduced from ride sharing services such as Grab and Go-Jek.

Additionally, the cost of owning and operating a car has increased less significantly than other aspects of life in Singapore. For instance, the average cost of compact cars has decreased from approximately S$144,292 in 2012 to S$98,928 in 2018. This decrease is influenced by the decrease in cost of Certificate of Entitlements (COE). In just the past year, a COE for a Category-A vehicle decreased from S$42,339 to S$25,501.

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Despite these decreases, purchasing a car is still expensive in Singapore compared to other countries, due to high taxes and fees. For example, Honda Civics are typically listed for about S$26,000 in the United States and S$37,000 in Korea, compared to S$103,000 in Singapore, pretty much guaranteeing most car owners will incur additional costs in a car loan.

Additionally, drivers do face significantly higher petrol prices in now than in previous years. For example, price data from the Singapore Department of Statistics indicates that the price of petrol increased by 36 per cent from January 2015 to October 2018.


Singapore is an costly place to live, and in some respects, is becoming even more expensive. As we have discussed above, essentials such as food, healthcare and education are increasingly costly.

However, it is encouraging to note that median incomes are also rising. In fact, the median income in Singapore has increased by an annual rate of 4.4 per cent (or 2.7 per cent after adjusting for inflation) between 2008 and 2018. This suggests that employed individuals are earning enough income to offset these price increases, on average.

This is a broad measure and is not intended to state that all families are able to keep up with rising prices.

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Methodology & Limitations

In order to study changes in affordability in Singapore, we gathered a variety of publicly available data from sources such as the Singapore Department of Statistics, Ministry of Manpower, Housing & Development Board, Urban Redevelopment Authority (URA), Monetary Authority of Singapore (MAS), SG Carmart, university websites and the US Bureau of Labor Statistics.

Using these data sets, we analysed trends in of prices and price indices in Singapore as well as income trends in the country and inflation trends outside of Singapore.

As mentioned in the section above, this analysis is limited in that it uses broad averages and does not consider how individual families are dealing with inflation and other economic factors. Still, we believe that it gives the reader a broad sense of affordability trends in Singapore.

This article was first published in ValueChampion

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