It's already home to some of the world's most expensive properties and considered one of the most costly places to live in. Now, the island state of Singapore is also one of the priciest places to own a car.
Recent cooling measures for the car market that include increasing the minimum down payment for a car to 40 percent, plus capping loans at five years from the previous 10 years together with a hike in ownership taxes have priced many households out of the car market.
Despite the fact that the wealthy financial hub has one of the highest per capita incomes in the world, there are few who can afford to buy a new car.
"It's out of my reach, very far away," said 43-year-old Andy Siew, a personal trainer with a monthly household income of 12,000 Singapore dollars ($9,650). "Any couple earning within that region cannot afford to buy a new car right now."
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According to Mohit Arora, Asia-Pacific executive director at market research firm J.D. Power and Associates, Singapore is the world's most expensive car market.
"You can look at the average price of a Toyota Corolla on the U.S. website, Indian website and Chinese website and you can look at it in a Singapore website. I don't think there will be anything left to debate there," he told CNBC.
Before the recent moves, the cost of buying a vehicle in Singapore was already very high compared to other developed economies. All new cars sold attract an ownership tax of at least 100 percent of the cost price. On top of that, anyone who wants to buy a car in Singapore has to first obtain a certificate of entitlement (COE), which gives them the right to own and drive a car for 10 years. The measure was introduced to limit the number of cars in the city that has an area of just 276 square miles.
Currently, the average cost of buying a COE is around 87,000 Singapore dollars ($70,000). The COE, for example, hikes the total price of an average sedan like a Toyota Corolla Altis to almost $120,000 in Singapore, compared to neighboring Malaysia where the same car starts selling for about $34,000. The latest Corolla models in the U.S. start at about $16,000, and $20,000 in the U.K.
Pricing Out Buyers
"Anywhere in the world owning a car is the announcement of coming to a particular status in society. I think this is going to become harder for an average Singaporean," said Arora.
Even at the higher end of the market, car buyers are feeling the pinch owing to the latest curbs by the government.
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A salesperson at a luxury car retailer in Singapore, who did not want to be identified, told CNBC that since the measures were introduced last week, it was becoming a "really uphill task" to find buyers.
"The general mentality at the moment is that if I have 100,000 Singapore dollars in cash - I wouldn't fork out that much for a car, maybe I'd rather buy a property," said the salesperson at the dealership of high-end cars where average prices hover around 200,000 Singapore dollars.
While the government's latest moves are an attempt to reduce household credit risk along with further controlling Singapore's more than 965,000 car population, it is also squeezing out marginal buyers, according to Vishnu Varathan, market economist at Mizuho Corporate Bank.
"The hit will probably be higher on lower income households given that lower income households are less likely to have a disposable 50,000 Singapore dollars to buy an average car," Varathan said. "Arguably, quality of life for the overall population has declined given all the transportation woes that we see."
Singapore boasts of world class infrastructure but as the city's population has grown from 4.2 million to 5.3 million in just 10 years, it has led to overcrowding in trains, buses and on the roads. The government plans to boost the city's public transportation system to encourage less people to drive, but analysts said until those increased services become available, it will impact people's mobility.
According to Arora, Singapore does not offer the kind of alternate public transport that is available in other parts of the world like Tokyo where you can implement such kind of highly restrictive policies.
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"Our transport system is not exactly that good, the infrastructure is not catering to us right now," Siew, who lives in Singapore's northeastern suburb, said. "The trains and buses are not on time, and taxis are so difficult to find sometimes, especially, on rainy days and peak hours."
As the burden on the city's transport system increases, owning a car for some becomes a need more than a luxury.
Forty-year-old Mike Tan, who has to travel a lot being a salesperson, is relieved he bought a brand new car a month ago before the tightening measures were introduced.
"If the policies came into effect before I changed my car, I probably would have kept my old car until the end of my COE," said Tan.
But Siew was not that lucky. He would have liked the "luxury" of replacing his seven-year-old Hyundai Avante with a new car as the COE on it expires in three years and will cost him more than $72,000 to renew. But now he may have to even give up on owning a car altogether.
—By CNBC.com's Rajeshni Naidu-Ghelani; Follow her on Twitter @RajeshniNaidu