Singapore: The Little Red Dot’s balancing act

Jaw-dropping prices

A highly educated youth population means that the more lower-skilled, labour-intensive jobs such as construction work are left to migrant workers. As of December last year, there were about 360,000 foreign workers in the construction sector. However, many wealthy foreigners, including Facebook co-founder Eduardo Saverin, also find Singapore an attractive place to settle, not least because of its low levels of crime and a maximum income tax rate of 20%. According to a recent report by research firm Mercer, however, the Republic has become the fourth most expensive city for expatriates. 

Of the city-state’s 5.3m, about 40% are permanent residents or foreign workers and students. Foreigners also make up about a third of the workforce. A recent population white paper by the government set out a planning parameter of up to 6.9m people here by 2030, but raised concerns of overcrowding among citizens, given the country’s humble land area of about 700 sq km. While this modest size has given rise to its affectionate moniker, the Little Red Dot, the inevitable physical limitations are keenly felt when it comes to transport and housing.

When the cast of the film Fast & Furious 6 were interviewed last year in Manila by a journalist from Singapore, they were asked to guess the prices of certain car models here. Actress Michelle Rodriguez’s jaw literally dropped upon learning that a Nissan Sylphy 1.6 litre cost $90,000, more than twice the $40,000 that she had estimated. 

Locals, however, are not astonished by the notoriously high vehicle prices, given that they include the cost of mandatory certificates of entitlement, or COEs, which were introduced to discourage car ownership and ease congestion on the roads. 

To the same end, Electronic Road Pricing (ERP) gantries, which toll passing vehicles, are also a common fixture on busy roads. But despite frequent complaints about these costs, the money seems to be the lesser of two evils, as our roads and highways do not suffer from traffic jams nearly as debilitating as those in cities like Bangkok or Sao Paulo. 

And for those who cannot afford cars, there is thankfully fairly efficient public transport in the form of buses and trains, which are easily accessible from most parts of the main island.

Space constraints have also affected housing. More than 80% of the population live in high-rise public housing provided by the Housing Development Board, a government statutory body. Of these, 90% also own their flat. But even as the buildings grow taller, perennial land scarcity has driven property prices up, especially in recent years. 

This prompted the government to introduce a series of cooling measures which have helped in stabilising prices. But while the cooling market has pleased the kiasu buyers, it has understandably upset some equally kiasu sellers, who are finding their properties less valuable than they had hoped. 

Rocketing property prices have also driven rental for retail spaces up, which in turn make it rather costly to shop here. 

While the malls and stores along popular shopping belt Orchard Road are a hit with tourists, many locals, ironically, prefer to hop on a budget flight to nearby Bangkok or Hong Kong, where clothes and shoes are cheaper, partly because of the weaker currencies.