Why is Singapore so expensive? In short, land is scarce, almost everything is imported, and the government deliberately makes owning a car costly. Add a 9% GST, property prices that keep climbing, and healthcare and education costs rising faster than inflation, and you get a country that regularly ranks among the priciest in the world.
But there’s a part the global rankings miss: how expensive Singapore feels depends heavily on whether you live like a local or an expat.
In this article, we’ll break down the nine real reasons behind Singapore’s high cost of living, who actually feels them, and what you can do about it.
(While the high cost of living is beyond our control, we can and should find ways to make better use of our money.)
How Expensive Is Singapore, Really?
Singapore has repeatedly topped the Economist Intelligence Unit (EIU)’s Worldwide Cost of Living survey, including in its 2023 edition, when it shared first place with Zurich.
That says a lot as Singapore is just a tiny red dot on the world map, measuring only 50 km from east to west and 27 km from north to south.
However, it’s worth understanding what that ranking actually measures.
The EIU prices a basket of goods reflecting an expatriate’s lifestyle, converted into US dollars. A strong Singapore dollar therefore pushes Singapore up the table even when nothing changes on the ground. By contrast, Numbeo’s crowd-sourced consumer price index placed Singapore around 19th globally as of mid-2026.
National data tells a similar story. While the cost of living has been rising steadily, the average headline inflation rateover 20 years (2005 to 2025) was fairly low at 2.14%. Meanwhile, the median gross monthly income from work, which was $5,775 in 2025, has been growing faster than inflation.
| Year | Median Monthly Income (Including Employer CPF Contributions) |
|---|---|
| 2015 | $3,949 |
| 2016 | $4,056 |
| 2017 | $4,232 |
| 2018 | $4,437 |
| 2019 | $4,563 |
| 2020 | $4,534 |
| 2021 | $4,680 |
| 2022 | $5,070 |
| 2023 | $5,197 |
| 2024 | $5,500 |
| 2025 | $5,775 |
So, is Singapore really that expensive?
For expats paying full price for housing, cars, healthcare, and international schools, yes. For locals, once you factor in government subsidies and the day-to-day spending patterns of a typical household, the cost of living is much more affordable than the headlines portray.
Still, whether you’re a local or not, living here can feel pricey. Here are the reasons why.
SIDE NOTE
A policy bought years ago. Savings in three places. A will that's still on the to-do list.
None of it is wrong. It's just not a plan yet.
There's an order that turns the pieces into one system, and it doesn't require becoming a finance expert. Here's the order, in 7 steps, so you know what to sort out first.
1) Land Is Incredibly Scarce
Land scarcity is one of the biggest contributing factors to high costs in Singapore.
Singapore has a land area of 735.6 km² (as at June 2024) and a total population of 6.11 million (as at June 2025), ranking it third in the world for population density.
With a growing population of Singaporeans and foreigners, careful planning to maximise the use of land is critical.
The government tries to reclaim as much land as possible, but there is only so much that can be done.
The lack of land space leads to other cost issues (more details later).
2) Very Few Natural Resources
One may say that Singapore has few, if any, natural resources.
It does, however, have a few competitive advantages, the strongest one being its port’s strategic location on the world map, connecting the East-West trade.
Singapore was ranked the world’s top maritime capital for four straight years and is the second busiest port in the world. The Port of Singapore is likely responsible for Singapore’s enduring success throughout the years.
While the potential creation of the Kra Canal in Thailand (through which ships would be able to bypass Singapore) may hinder port activity in the future, the government has made plans to ensure the continuity of its ports. Moreover, Singapore has been careful to not place all its eggs in one basket by diversifying into other activities that generate GDP.
Having said all of that, if you take away the port, Singapore is simply a plot of land. Some basic necessities have to be acquired externally.
Firstly, it has to import water from its neighbour. Singapore needs 430 million gallons of water a day, and it is currently able to receive up to 250 million gallons a day from Malaysia.
Secondly, more than 95% of Singapore’s electricity is generated from imported natural gas, mostly coming from Malaysia and Indonesia.
Leaning on your neighbours for basic needs doesn’t just add cost, it also leaves you exposed if tensions ever arise.
3) Property and Rental Prices Keep Rising
Singapore’s land is a prized commodity.
As a result of a growing population, the demand for property has been increasing, yet the supply is limited, causing property (and rental) prices to go up.
The median price of an HDB flat is $628,000, while a private condominium costs $1,875,000. Of course, the closer the property is to the central region, the more expensive it will be, and housing costs have been climbing across the board.
If you’re a Singaporean, government policies such as the subsidising of HDB flats and offering grants allow such properties to remain affordable, no matter which income group you belong to.
However, if you’re a foreigner, be prepared to pay a lot more. Apart from regular taxes, foreigners need to pay an Additional Buyer’s Stamp Duty (ABSD), which is 60% of the purchase price or the market value of the property, whichever is higher.
With the high costs of purchasing a property, rental prices will be high as well.
4) Strong Emphasis on Education
The starter kit of a Singaporean is to get good grades and then get a good job. This mindset has been drilled in over the years, and it’s not hard to see why.
As Singapore doesn’t have land or natural resources (apart from its port), it has to rely on its people.
It invests heavily in education, knowing that human capital is needed to support an influx of multinational corporations (MNCs), which the government has attracted with favourable policies such as low corporate tax rates and ease of doing business.
A better-educated workforce pays off for the individual, but also for the companies that hire them and the wider economy.
Today, this emphasis on education is still prevalent.
Parents are willing to invest in their children so they can achieve success both inside and outside of the classroom. They want their kids to get into the best schools and often enlist them in private tuition and enrichment classes.
With such a strong demand, the costs of education have increased. Over the past 20 years (2005 to 2025), the average education inflation rate was 2.68%, while the average headline inflation was 2.14%.
In 2026, the average cost of tuition fees for a university degree is $38,790. Across the board, education costs have risen steadily from preschool right through to university.
While Singaporeans enjoy subsidies by the government from pre-school to tertiary education, foreigners pay the full price. It costs even more if you send your kids to an international school.
So whenever you see a foreign student in Singapore, you can expect that they either come from a well-to-do family or they’re on a sponsorship.
QUICK CHECK
Can you answer these three questions?
1) If something happened to you tomorrow, how much would your family receive?
2) At 65, what monthly income will your savings and investments pay you?
3) If you never get round to a will, who inherits what, and in what proportion?
Most people manage one at best. Not because they're careless, but because nobody has shown them which order to tackle things in.
That order exists. Work through your finances in this sequence, from income and protection through to investments and estate planning.
5) The Most Expensive Place in the World to Own a Car
Because of Singapore’s small size, if everyone were to own a car, the roads would be congested and there would not be enough places to park them.
That’s why the government limits private car ownership through the Certificate of Entitlement (COE), a permit you must bid for before you can even buy a car, and which lasts only 10 years.
COE premiums are steep. In the first bidding exercise of July 2026, the COE for a Category A car closed at a record $129,000. That’s the price of the permit alone, before you’ve paid for the actual car.
This system makes Singapore the most expensive place in the world to buy a car. For example, a brand new Toyota Corolla Altis costs $195,888 (as of 9 Apr 2026). Plus, you’ll still have to pay for other fees and costs, such as:
- Road tax
- Mandatory car insurance
- Servicing and maintenance costs
- Petrol
- Parking
- Road tolls (Electronic Road Pricing)
It doesn’t matter whether you’re a local or not, owning a car in Singapore is expensive.
Fortunately, because of its compact size, it’s easy to get from one place to another via public transport (e.g., buses and trains).
By public transport, it takes around two hours from one end to another, but for most journeys, commute time is shorter.
In general, public transport is affordable and will suit most needs. However, if you prefer comfort and/or need to get to another place fast, private hire cars (e.g., Grab) and taxis aren’t that costly either.
6) More Than 90% of Food Is Imported
Since land is valuable, it’s usually prioritised for higher GDP activities.
As such, you won’t see a lot of land meant for agriculture. In fact, more than 90% of all food consumed in Singapore is imported.
Having to rely on others for food places Singapore in a tricky situation.
Not only can food supply interruptions happen (which the government counters via various strategies), importing food comes with additional costs, and Singapore has to accept the prices (and their increases) from its suppliers.
Nonetheless, to a consumer, a large variety of food is available at different price points.
In most countries (including Singapore), buying groceries and cooking for yourself is the most cost-saving option.
Dining out tends to cost a little more (because of rental and labour costs in producing cooked food), but it can still cater to everyone’s budget.
For the budget-conscious, hawker centres, coffee shops, and food courts are everywhere. A typical meal at these locations costs less than $5. If you want to indulge, restaurants are ample, too.
7) Healthcare Costs Are Rising Faster Than Inflation
The other contributing factor to human capital, apart from education, is healthcare.
Thus, the government spends billions a year on healthcare to ensure its people stay healthy, which then increases overall productivity.
When we look at national data, the average healthcare inflation rate in Singapore was 2.35% over 20 years (2005 to 2025).
This meant that healthcare costs increased at a faster pace than the general cost of living. Some of the reasons behind this:
- Singapore has an ageing population and its people are living longer
- More people are utilising healthcare facilities
- There has been an increase in manpower and operating costs
- Premiums for health insurance are increasing
As usual, Singaporeans get subsidised heavily if they go to a public hospital. Coupled with a compulsory medical insurance, MediShield Life, a substantial portion of the bill can be claimed. For better coverage, they can upgrade their medical insurance with an Integrated Shield Plan, enjoying advanced coverage from private hospitals.
However, for foreigners, the full rate is payable.
8) Higher Standards of Living
As a country gets richer, so do the expectations of the people living in it.
Some do slip through the cracks, and there are channels to help them. But for most households, the basics are covered, and once they are, attention shifts to living a bit better.
That’s when spending creeps into comfort and luxury: nicer meals out, overseas holidays, the newer phone. Singaporeans, in particular, love to eat well and travel. All of that lifts the overall cost of living, even if none of it is strictly necessary.
9) GST and Sin Taxes Raise Everyday Prices
Nearly every purchase in Singapore carries the Goods and Services Tax (GST), which rose to 9% on 1 January 2024, up from 7% just two years earlier.
The government cushions the impact for lower- and middle-income households through the permanent GST Voucher scheme and utility rebates. But for most working adults, the higher rate simply means everything costs a little more at the till.
On top of GST, certain goods carry heavy excise duties designed to discourage consumption.
Alcohol is the clearest example. Spirits are taxed at $88 per litre of alcohol, and beer at $60, before GST is added on top. That’s largely why a pint at a bar can easily cost $15 or more, and why alcohol in Singapore is among the most expensive in the world.
Tobacco and vehicles (as covered earlier) face similar treatment.
So if you’ve ever wondered why a drink here costs double what it does across the Causeway, the answer is mostly tax, not the drink itself.
What Can You Do About Rising Costs?
In summary, how expensive Singapore is depends greatly on whether you’re a local or not.
For most locals, living expenses can be affordable or costly depending on your needs and wants. However, for expats and foreigners, you can expect certain expenditures to be on the higher side.
Regardless, one important aspect people tend to neglect is budgeting and financial planning.
You see, while the prices of goods and services are outside of our control, how we deal with our finances is entirely within our control.
However, one in two adults in Singapore don’t even know how much they spend every month.
If you don’t know where your money goes, or how much should go where, overspending creeps in. Repeat that year after year and you’re left with little to no savings, which is exactly when everything starts to feel expensive.
If you’re already saving a healthy amount, keep at it, and do capitalise on various alternative investments rather than letting cash stay stagnant in the bank. That way, you’ll beat the rising cost of living, and you’ll have more money to enjoy in the future.
Also, don’t forget to put in place the different types of insurance plans out there, so that if anything happens, your expenses and financial commitments can continue to be paid off.
BEFORE YOU GO
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