Hong Kong vs Singapore: which city is better for expats?

By Businessweek , June 30 2017
Hong Kong vs Singapore: which city is better for expats?

In the race to lure talent for global firms' regional headquarters, Hong Kong and Singapore have long been neck-and-neck. While many companies make their managers locate in one or the other city — often depending on whether their duties focus more on Southeast Asia, or on China — others give top talent a choice.

Back before Hong Kong’s handover to Chinese rule in 1997, Hong Kong had an edge due to expectations of the opening of China’s economy, the city’s role as the entrepot on the border, and the banking industry poised to capitalize on it.

Now, Singapore’s push into innovation and technology has the Lion City on an upswing, said Karen Koh of recruiting and consultancy firm HRnetOne, who works in the Singapore-based company’s Hong Kong office.

“Twenty years ago, Hong Kong was a more popular expat destination than Singapore because of the job opportunities or perception that banking was much hotter in Hong Kong,” she said. “I don’t think banking will ever be able to compare with Hong Kong, but other sectors in Singapore have come up.”

For expatriates considering which city to choose, here’s the ultimate Hong Kong versus Singapore guide, with prices converted to US dollars:

1. First things first: your salary

The top salaries in Hong Kong for jobs in the financial industry are about 25 percent higher than in Singapore on average, according to data compiled by Bloomberg from the 2017 salary survey of recruitment firm Robert Walters. That trend carries across most industries.

Personal income taxes in the two cities are relatively low. The top rate in Singapore for income above the first US$230,500 is 22 percent; in Hong Kong, the top rate is 17 percent.

2. What you spend your money on

Those extra dollars don’t necessarily get you as far in Hong Kong, however. The city has overtaken Tokyo as the most expensive in the region and second overall in the world for expatriates, behind only Angola’s capital Luanda, according to the latest cost of living survey from consultancy firm ECA International. Singapore, by contrast, is 24th on its list.

The survey tracks the cost of goods ranging from groceries to beer and tobacco, while excluding spending such as rent and school tuition.

Taxes on alcohol mean the price of imbibing is higher in Singapore.

A pint of beer in a Singaporean pub goes for about US$9, while the same will set you back US$7.70 in Hong Kong, according to Deutsche Bank's 2017 report on global consumer prices using data gathered from Expatistan.com, which compiles input from thousands of people reporting the prices they pay in various countries.

The bank’s Bad Habits Index, which combines the price of five beers and two packs of cigarettes — also heavily taxed — has Singapore ahead, at US$64.30. In Hong Kong, it’s US$53.50.

The foodie expatriate may be interested to know: Hong Kong boasts 61 Michelin-starred restaurants, including six with three stars. Singapore has 29, with its Joel Robuchon outpost the only 3-star establishment.

3. How much you'll pay for housing

For most people, the single biggest cost, though, is housing — unless companies still offer housing packages, which have been increasingly dwindling.

Expat packages for both cities have been sliding for the past five years, down 2 percent to US$265,500 in Hong Kong and 6 percent to US$235,500 in Singapore, according to ECA’s MyExpatriate Market Pay survey.

While salaries have risen in Singapore in the same period, the decline in benefits has reduced the total package value, according to Lee Quane, ECA’s regional director for Asia.

“The cost of housing in Hong Kong is obviously higher than it is in Singapore,” said Quane in a phone interview. “Companies obviously have to reflect that in the person's salary by either providing a higher housing allowance to the expatriates in Hong Kong or bumping up the employee's salary.”

For those paying their own rent, Hong Kong is more expensive than Singapore by a huge margin.

Overall, rent in Hong Kong is 47 percent more expensive, according to June data from Expatistan.com. Monthly rent for a 900-square-foot furnished residence in an expensive area costs about US$2,600 in Singapore, while the equivalent in Hong Kong costs almost US$4,900, the site said.

“The housing cost is the biggest downside for Hong Kong right now,” said Patrick Groth, Asia regional director for relocation company Crown World Mobility. “That’s a big disadvantage because you get much, much more for your money in Singapore.”

4. Doing business and investing money

Those looking to park their cash in local investments have done better in Hong Kong over the years. Real estate investors have seen secondary home prices soar 400% since the last property slump in 2003. Hong Kong’s stock market has beaten Singapore’s over the past five years, too.

International companies based in Hong Kong rose 53 percent since 1997, totaling almost 1,400 as of last year, according to government data. Singapore, which tracks total investment by foreign companies, recorded a 12 percent decline in the 2011-2015 period, with U.S. companies the only ones to increase their presence.

Yet Singapore beats Hong Kong as a more attractive destination price-wise for companies, according to a report last year from DTZ/Cushman & Wakefield.

Hong Kong suffers from higher costs, while Singapore boasts cheaper office rent — about half the price on a per square meter basis, the report said. Singapore ranks No. 2 in Asia, behind South Korea, and No. 6 in the world on the Bloomberg Innovation Index.

For those starting their own businesses, Singapore also ranks No. 2 in the world — after New Zealand — for how easy it is to get off the ground and through regulatory hoops, according to the World Bank’s latest ranking. Hong Kong ranks No. 4, up one place from a year before.

5. The price of getting a car on the road

Singapore is possibly the most expensive place in the world to drive, due to regulations and fees designed to keep traffic from turning into the chaos that befell Jakarta, Manila, Bangkok and other Southeast Asian cities as incomes rose and more residents could afford to get behind the wheel.

Drivers must bid for a limited number of special permits, as well as pay a slew of taxes and recurring fees that can more than double the cost of car ownership.

An Audi A6 luxury sedan costs, all-in, about US$70,400 in Hong Kong, based on manufacturers’ suggested pricing, which includes a First Registration Tax, annual fees and insurance

In Singapore, the car would cost about US$168,100 based on quoted prices from authorized distributors, according to the government’s vehicle registration website.

Taxis are relatively cheap, however: an 8km taxi ride will set you back about US$8 in both Singapore and Hong Kong, according to Expatistan data. That compares with US$22 in London and US$15 in New York, the data show.

6. Pollution and the air that you breathe

Hong Kong became notorious for its high levels of air pollution, so the government began enacting curbs on emissions — from vehicles and heavy cargo ships using its port — as well as cooperating with officials in Guangdong province to try to reduce smog blowing across the border.

These measures have shown results. Since 1999 Hong Kong has curbed roadside levels of nitrogen oxides by 56 percent, and fine particulate matter, known as PM2.5, by 52 percent, according to 2016 government data.

Singapore, despite stringent vehicle emissions standards, is occasionally plagued by trouble from across its border as well: haze from Indonesian wildfires. The city suffered from another spike in 2016.

Singapore reported good or moderate air quality for 87.5 percent of the year in 2015. That’s lower than the 97 percent of the previous year, due to the wildfires. Hong Kong reported 247 clean air days, for 67 percent of 2016, according to data compiled by Bloomberg based on the city’s air quality index.

7. Educating and taking care of the kids

The cost of private school rivals rent as the biggest cost in each city.

Tuition for a new middle-school student at Singapore American School costs about $36,200 if the student comes from a non-American family. At the American School Hong Kong, a similar new student entering grades 7 or 8 will need to pay about US$25,200, including the entry fee, plus either a recurring annual fee of US$2,600 or a refundable debenture of US$77,000. It’s also difficult to get a spot in a number of Hong Kong schools.

“As soon as we knew that we were moving to Hong Kong, one of our most immediate thoughts was: Start applying for schools now because it is so competitive,” said Adam Johnston, managing director with Robert Half Hong Kong, a unit of staffing firm Robert Half International and father of 1- and 3-year-old kids.

Yet Singapore’s secondary schools beat Hong Kong’s in the global Program for International Student Assessment, or PISA, ratings. Singapore ranks at the top for math, reading and science. Hong Kong is No. 2 in reading and math, but fell to No. 9 in science in the latest test.

Most young families will also hire a domestic worker to help out. Minimum wage for such workers in Hong Kong is currently about US$550 a month, according to the government. Food, health-care and other costs are additional. In Singapore, wages for Filipino maids and nannies are mandated by the Philippine government. As of last year, they were the equivalent of US$400 a month.

20 Jun 2014

Total posts 59

I lived in Hong Kong for 3 years. All of the above seems fair.

Housing is a massive expense, no doubt. The other costs of living are reasonably cheap, although imported goods that only expats buy can be expensive (I used to pay A$35/kilo for sausages).

The article should mention that rent is tax-deductible in Hong Kong, so once your rent is subtracted from your gross income, your effective tax rate will be well below 17%. Over 3 years, my average income tax rate was about 7-8%.

Cars are cheap if you buy them secondhand. No one wants a 3-5 year old luxury car in Hong Kong so they can be had much cheaper than in Australia. Also, in a lot of areas, you may find you don't need a car. Public transport is the best in the world and taxis are cheap. We had a car but used it once or twice a week at most.

Pollution is a real problem in Hong Kong. I'm not a person who worries a lot about my health but even I was a bit troubled by it. The government has to do more to fix it.

Looks like this is a US article - it should mention the Australian school. It is easier to get into if you are Australian and it's a very good school in terms of teachers and curriculum. Fees are not as high as the examples in the article but still high - about what you'd pay at the average private school in Australia. The ESF schools are cheaper and still excellent, Discovery College is particularly popular with Australians.

This article should mention the weather as a big difference between HK and Singapore. HK has actual seasons. It is unbearably humid in July but otherwise the weather is pretty mild. In spring and autumn it is lovely, mid 20s and sunny most days. Singapore is hot and humid and pretty much the same year round. 

30 Jun 2017

Total posts 1

Thanks for the HK tips. My partner and I are moving there in September and not quite sure how to gauge general living expenses apart from the exorbitant rent. Is rent tax-deductible only if you're an expat or does it apply to a local contract too? 

20 Jun 2014

Total posts 59

For your rent to be tax deductible, you just need the cooperation of your employer. It's a little more complicated than a straight tax deduction: basically you provide a copy of your lease and rental receipts to your employer, and they report these amounts to the tax man as a housing allowance. 

The housing allowance doesn't count as taxable income, instead they add a fixed amount to your taxable income (I think it is 10% of your taxable income) as the nominal value of the housing allowance. 

So say you earn $100k a month but you spend $40k on a flat. Your employer declares your income as $60k plus a housing allowance. The taxman adds $6k to your taxable income as the nominal value of the housing allowance. So your taxable income ends up being $66k. 

It's a weird system but given many people spend 30-50% of their income on housing it saves a lot of tax.

In terms of living expenses other than rent, it is hard to generalise. Some things are much cheaper than Australia, particularly transport, local food, and anything where the main cost is labour. Retail goods like electronics and clothes are often about the same as Australia, maybe a bit cheaper. Imported stuff can be expensive, this affects expats a lot. Foods like milk, cheese, coffee, Australian meat, breakfast cereal and other stuff that is not popular with the locals can be really pricey. You end up cutting back on old favourites or importing stuff yourself. I used to bring suitcases full of Vita-Brits back from Australia as I am addicted to them and they cost A$14 per 1kg box in Hong Kong.

Also it depends on the exchange rate, at the current rate HK$6 to the Aussie prices are often about the same. When I was living there it was more like HK$8 to the Aussie and everything was a bargain. Old timers remember when it was HK$4 to the Aussie and everything was super expensive. 

Qantas - Qantas Frequent Flyer

22 Jul 2015

Total posts 220

Singapore is just easier to get around these days. HK is great but becoming very Chinese.  

20 Apr 2014

Total posts 93

bit of an odd statement given the majority chinese ethnic population of singapore!

Qantas - Qantas Frequent Flyer

18 Jun 2015

Total posts 105

Its interesting on a flight from HKG to SYD. I sat next to a lady a few weeks back who was returning to Sydney for a few weeks while her husband was away. She said she really didn't like Hong Kong. She thought it was sexist, behind and she was stereotyped as a women who appeared a little Philipino. 

When going for her hkid when asked what her occupation was she said "IT change / release Manager" but still looking for work. They replied. Right  Occupation "housewife". 
When getting out of a taxi the driver didn't want to help with bags untill he realized they were very light. She believes he was stereotyping her. 

She mentioned that when interviewing for jobs most didn't know what a IT release manager was. Apparently things just break in production all the time and thats normal.

So her as an expat wife or someone who moved with her other half didn't think it was great.

20 Apr 2014

Total posts 93

the air pollution stats on HK are vastly understated in this article - the territory suffers on many fronts from life threatening pollution levels throughout the year: multiple coal fired power stations in close proximity, diesel emissions from the port, ancient trucks and cars and the factories in neighbouring china. the highly built up urban environment serves to trap this in also. 

Singapore is far superior in this regard only suffering from pollution from Indonesia for a month out of the year.

20 Jun 2014

Total posts 59

The best line I ever heard on Hong Kong vs Singapore:

Hong Kong is freedom without democracy, Singapore is democracy without freedom.

Qantas - Qantas Frequent Flyer

18 Jun 2015

Total posts 57

This article made me appreciate living in Australia even more!

Singapore Airlines - The PPS Club

03 Jul 2017

Total posts 17

I have been living in singapore for 6 years now and before that I lived in hong kong and I have to say singapore beats hong kong easily.The transport here in singapore is excellent no need for a car the public transport system is cheap and well connected all over the country.The food is as good as hong kong and the most important thing here is it is safe very safe unlike most other Asian and Australian cities.

20 Jun 2014

Total posts 59

I'm interested to read your view Bonzer Mike. Singapore definitely has some advantages over Hong Kong, but public transport, food and safety are all just as good or better in Hong Kong.

I've never lived in Sing but I visit often and have friends who live there. I would say that the main advantages it has over HK are the air quality, the cleanliness of the city generally, and the lower rent. I have a friend from HK who started a business in Sing recently and she was amazed at how much easier it is to deal with the Sing government compared to the HK bureaucracy. 

On the other hand, HK has better weather, more to do on weekends, and everything except rent is cheaper.

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