Traditionally, you’d never really know how expensive a country is until you’ve been there firsthand. Luckily, in the Internet age, it is easier to get a taste of an economy by looking at the little things. Despite astronomical housing prices in Hong Kong, it is still possible to feed yourself for a few dollars a day. Can you say the same thing about Oslo? No! The price of a movie, a can of Coke, cigarettes, and gasoline: these are also important measurements in determining the overall cost of living in a city. While New York may seem like a millionaire’s paradise, it still has to sell milk and eggs at a price that will keep the millions of regular folk alive and fed, as well as frequenting their stores. Looking at the cost of a few regular items from the home cities of Hong Kong, Taiwan, Singapore, Vancouver, and Oslo we can compare these items with Miami real estate, to find some surprising conclusions.
Comparing the cost of living to real estate is not a new idea. A few years ago, The Economist introduced a concept called the Big Mac Index. The thinking is the same. You can gauge an economy based on how much it charges for a burger with fries. It shines some light into some less explored corners. After all, if cost of living is not keeping pace with its real estate, is that indicative of a bubble?
There is a brilliant website called Numbeo. This site is devoted to gathering information from people around the world, who keep track of the cost of everyday things, from rent to cigarettes, in the cities they live in. It’s one thing to have an exorbitant mortgage. But it’s a completely different issue if the amount you are paying is disproportionate to the cost of living in that city. Let’s do a quick comparison.
In Hong Kong, the cost of a can of Coke is HK $10. This is about $1.29 in USD. This price is what you’d pay at a corner store. A pack of Marlboros is HK $50, which works out to $6.45 USD. A cinema ticket is $9.35. And a liter of gasoline is HK $17.56 ($2.27 USD or $8.60 a gallon). Besides taking the Rolls Royce out on a Friday night, very few people drive in Hong Kong. It’s mostly taxis. So gasoline might not be the best comparison in this instance. Otherwise, the cost of these items seems fairly comparable to American standards. However, housing in Hong Kong is expensive: on average, $1,049 per square foot. It is estimated that the average Hong Kong resident spends 47% of their income on housing.
In Taipei, prices are lower. A can of Coke is 68 cents. A movie ticket is $10.29. Gas is $3.98 a gallon. And smokes are $2.00 a pack. Taipei is one of the most densely populated places on earth. Downtown apartments are $765 per square foot.
In Singapore, a can of Coke is $1.23. A pack of cigarettes is $9.80. A gallon of gasoline is $6.52. A movie ticket is $8.17. And the average cost per square foot is $1,608. The cost of having a car on the island can double or triple the cost. And, Singapore is probably one of the most expensive places to own real estate in the world.
In Vancouver, Coke is $2.00. A movie ticket is $12.75. Gas is $5.31 a gallon. And an apartment downtown is roughly $710 per square foot.
In Oslo, Marlboros are $14.95 a pack. Cokes are $5.23 a pop. Gas is $9.40 a gallon. A movie ticket will set you back $17.44. Yet the cost of housing is on average $863 per square foot.
In Miami, Cokes are $1.50. Marlboros are $6.50. Gas is $3.97 a gallon. Movie tickets are $10. And at an average of $240 per square for all and $657 per square foot for luxury properties in Miami, Miami real estate is the most affordable of the international cities listed here.
In conclusion, the best value, it seems, can be found by comparing the difference between the most basic costs of living such as gasoline, Coke, and cigarettes, to the cost of ownership. In Singapore and Hong Kong there is a wide gap between the cost of living and the cost of real estate. This does not seem like a sustainable model. The best bet is to find a balanced, habitable economy, like Miami.