Singapore vs Kuala Lumpur: Which City is More Affordable?

Cost of Living Comparison: Singapore vs. Kuala Lumpur

Is it more affordable to earn and spend Singapore Dollars (SGD) in Singapore than to earn and spend Malaysian Ringgit (RM) in Kuala Lumpur? This question has sparked debate, with differing opinions on the actual cost of living in each city.

Initial Perceptions and Social Media Poll

A Malaysian netizen's Facebook post claiming "Singapore is very cheap" triggered a heated online discussion. A social media poll revealed that 64% of respondents believed the cost of living in Singapore is more affordable, while 36% felt Malaysia is more affordable.

Personal Experiences: Zhang Xuexuan

Zhang Xuexuan, originally from Perak, Malaysia, worked in Kuala Lumpur for seven months after graduating from university. Her salary was around RM3,000 to RM4,000 before deductions. She moved to Singapore in 2024 for better career opportunities, earning a similar salary in SGD as a quantity surveyor. Zhang finds Singapore more affordable, citing cheaper economy rice and groceries. She noted that shampoo and conditioner cost RM50 in Malaysia, totaling around RM80 with other groceries. In Singapore, the same items cost only 12 SGD, with a total of 25 to 30 SGD including toothpaste. She also highlighted the availability of 3 SGD spaghetti at a food court near her house.

Personal Experiences: Ye Jiayi

Ye Jiayi, from Johor, worked in banking sales in Singapore for about six months in 2017. After finding that job unsuitable, she moved to Kuala Lumpur with her husband. As a dual-income, childless family, Ye Jiayi has observed a significant increase in prices in Kuala Lumpur, especially for food, estimating a 10% to 30% increase after COVID. She mentioned that economy rice in Singapore could be found for 4 to 5 SGD, which is impossible in Malaysia, where two vegetables and one meat cost at least RM10 to RM15. She contrasted a weekday lunch special in Kuala Lumpur, costing RM17.90, with increasing food prices despite stagnant salaries. The couple spends between RM1500 and RM2500 on food monthly due to their love for eating.

Savings and Expenses

Ye Jiayi mentioned that she could save around 20% of her income when working in Malaysia, but this increased by 10% to 15% in Singapore. Her biggest expense in Singapore is rent, paying 820 SGD compared to the RM500 she paid for a partition room in Malaysia. While food costs are also significant, she believes the price difference in food and daily necessities can partially offset the higher rent.

Consumption Patterns

Data analysis reveals that in Singapore, the top three consumption areas are housing (14.77%), transport (13.16%), and recreation (10.4%). In Kuala Lumpur, the top expenses are food and non-alcoholic beverages (19.74%), housing rents and utilities (13.5%), and transport (11.89%). This suggests that Kuala Lumpur residents spend a larger portion of their income on essential items compared to Singapore residents.

Wealth and Quality of Life

It's suggested that as societies become more prosperous, the proportion of income spent on necessities decreases, with more disposable income allocated to entertainment and personal fulfillment. In Kuala Lumpur, a couple needs more than RM10,000 per month for a comfortable lifestyle, with expenses potentially reaching RM15,000 to RM20,000 if they have no children. An income of RM10,000 is not considered wealthy. Some Malaysians may need to take on extra jobs to improve their quality of life.

Purchasing Power and Affordability

The purchasing power of SGD is higher, exemplified by being able to purchase two Uniqlo shirts for 100 SGD compared to only one for RM100. Working in Singapore allows for more frequent travel and spending. Affordability is not solely about cost; it's also about whether people can cover daily expenses based on their income. The median wage in Singapore is significantly higher (at least six times) than in Malaysia. Singapore is ranked higher than Kuala Lumpur in purchasing power, indicating that residents can afford more goods and services despite the higher cost of living.

Expenditure vs. Income

Data shows that the average monthly household expenditure in Singapore accounts for approximately 38% of the average monthly income. In Kuala Lumpur, it accounts for around 59%.

Economist Intelligence Unit Survey

The Economist Intelligence Unit's Worldwide Cost of Living Survey consistently ranks Singapore as one of the most expensive cities. This survey aims to assist multinational companies in determining living allowances for expatriates, who typically have more expensive consumption preferences. This explains why Singapore ranks higher for expatriates compared to ordinary residents.