eFinancialCareers: Bankers favour Hong Kong over Singapore due to soaring living costs

An article recently featured on eFinancialCareers, a financial services careers platform, asserted that Hong Kong bankers are increasingly reluctant to entertain the idea of relocating to Singapore.

This reluctance reportedly stems from mounting living expenses and a perceived “lack of excitement” in the island nation.

The article highlighted Hong Kong’s recent adjustment in tax rates, with individuals earning over US$640,000 now facing a 15% tax rate, presenting a relatively favourable scenario compared to Singapore.

In contrast, for Singapore’s personal income tax rates for resident taxpayers in the Year of Assessment (YA) 2024, chargeable income ranging from S$500,000 to $1 million will be taxed at 23%, while income exceeding S$1 million will face a 24% tax rate. For incomes surpassing S$120,000 (approximately US$89,267), the chargeable rate stands at 15%.

The article noted that as Singapore’s cost of living continues to escalate, this disparity becomes increasingly significant.

Last year’s Mercer Cost of Living survey ranked Singapore as the world’s second most expensive city for expatriates, with Hong Kong holding the top spot in 2022 and Singapore ranking sixth.

While acknowledging Hong Kong’s traditionally high living costs, the article pointed out a narrowing gap between the two cities.

Hong Kong bankers emphasize that Singapore’s rising cost of living is a significant deterrent to relocation.

“It would take a really significant career opportunity to get me to Singapore,” remarked a managing director on the trading floor of a European bank in Hong Kong.

“The cost of living there is just too high, plus Hong Kong is where all the action is.”

Notably, this isn’t the first time the website has drawn comparisons between Singapore and Hong Kong. A January 2023 article quoted a Hong Kong bankers describing Singapore as “expensive and dull.”

“Anyone who wanted to leave has left, and it’s no secret that Singapore has become quite expensive in terms of housing and taxes. Singapore’s immigration rules there have also been tightened due to their own political issues, plus it’s all small scale in Singapore and that’s not everyone’s cup of tea.”

A Hong Kong equity strategist echoed these sentiments, expressing hesitation to relocate to Singapore due to what he perceives as an economic bubble.

“The cost of living is higher than it used to be in Singapore – you’ll pay more there for accommodation and for schooling, so it’s better to live in Hong Kong,” he said.

MTI disputes Economist’s costliest city ranking, questioning its accuracy in reflecting Singaporean cost of living

In December last year, a survey published by The Economist magazine indicated that Zurich and Singapore are the most expensive cities in the world ahead of New York amid the ever-rising cost of living.

The findings of the Worldwide Cost of Living survey published by the Economist Intelligence Unit (EIU) highlighted that Singapore kept its position as the world’s most expensive city this year, for the ninth time in 11 years.

It ranks jointly with Zurich (Switzerland), which is back at the top after three years.

After the survey was released, the Singaporean government swiftly responded.

The Ministry of Trade and Industry (MTI) defended that the survey might not accurately portray the cost of living for Singaporeans.

On 30 November, a spokesperson for the MTI asserted that the EIU’s survey aims to assist human resource and finance managers worldwide in calculating living costs, providing allowances for expatriates and business travellers, and formulating compensation plans.

The spokesperson emphasized that the consumption basket used in the survey does not align with the typical spending patterns of Singaporeans.

Furthermore, the survey converts the prices of goods and services in the surveyed cities into US dollars to facilitate comparisons between cities, said MTI.

“Our country’s strong exchange rate places us high in the rankings compared to other cities, but the strengthened currency does not raise the cost of living for Singaporeans earning income in Singapore dollars.”

“Conversely, a stronger Singapore dollar helps to curb imported inflation in Singapore by reducing import prices, subsequently lowering consumer prices.”