For HNW individuals who want to know where it costs most to enjoy a luxury lifestyle, goods and services, the annual study from the Swiss bank shows that Asia is the most expensive, and Singapore comes top. London is in fourth place. Other Asian cities as well as Dubai and New York are in the top 10.
Asia is the most expensive region in the world in which to live
well and Singapore is the costliest city, according to this
year’s annual study of wealth and lifestyle by Julius Baer.
The report, covering 25 cities, also shows that Europe, the
Middle East and Africa is the least expensive part of the world
overall, although London and Dubai are hotspots. Zurich has
slipped down the rankings. The study tracks the prices of
various high-end services and products, and conducts a lifestyle
survey.
The data showed that HNW individuals, and the items and services
they buy, ranging from watches to hotel suites, are exposed to
rising global inflation and disruptions after the pandemic.
As part of the study, Zurich-listed Julius Baer – which treats
Asia as its second home market – produces its Lifestyle Index,
which analyses the cost of a basket of goods and services
representative of “living well.”
Asia remains the costliest region in which to live well for the
fourth year in a row. Singapore, the most expensive city, is
followed by Shanghai – last year’s leader – and Hong Kong in
second and third respectively. The Taiwanese capital Taipei is
the only other Asian city to feature in the top ten, taking the
eighth spot.
London ranks fourth (falling from second in 2022), followed by
New York (rising from 11th), Monaco, Dubai, Taipei, São Paulo,
and Miami (up from 18th).
As Europe fell in the rankings for expense, London is the only
European city in the top ten. Dubai has enjoyed a rapid rise in
the ranking to seventh place, helping to relegate Zurich to
Dubai’s former position of 14th.
The Swiss bank’s index tracks items such as cars, ladies’
handbags, men’s suits, residential property, watches, wine,
business class flights, meals, MBA programmes, health insurance,
and hotel suites.
Priorities
“Against a backdrop of a cost-of-living crisis, soaring energy
costs, rampant inflation, and war in Europe, this year’s Global
Wealth & Lifestyle Report shows that the top priorities among
affluent individuals and families across the globe are a contrast
between financial stability and personal resilience,” Christian
Gattiker-Ericsson, head of research at Julius Baer, said in the
report.
“Wealth is now as much about ensuring the health and security of
your family, both physical and mental, as it is about maintaining
your lifestyle,” he continued.
The Americas
In the Americas, urban centres have regained some of their lustre
as expensive places, overtaking the EMEA region.
In this region, the average price increase of goods and services
in the past 12 months has risen 12.3 per cent – the lowest of all
regions (but only by a marginal 0.2 per cent). The resoundingly
strong performance of the dollar during 2022 exponentially
weakened the performance of other major local currencies in
regions surveyed. The only currencies to post a positive
performance versus the dollar – the Brazilian real and Mexican
peso – helped drive this year’s result.
US headline inflation fell dramatically in the second half of
2022, while major Latin American economies tightened monetary
conditions early and aggressively to control it. Although
increased prices remain a strain on the cost of living for all,
consumer spending in the US is at pre-pandemic levels, even when
adjusted for inflation, the report said.
EMEA
European index item prices fell in dollar terms as the US
currency appreciated in 2022. However, all items rose in
local currency terms.
Within the region it is luxury consumables that have seen the
sharpest hikes in local currency prices. Both fine wine (+37.1
per cent) and whisky (+29.6 per cent) have limited production and
an element of speculative pricing due to scarcity, but the raw
materials are also becoming costlier – grape harvests
increasingly suffer from the effects of climate change reducing
supply, the report said.
In line with the global trend, hospitality services, including
fine dining (+23.1 per cent) and hotel suites (+16.1 per cent),
have experienced a sharp surge in demand from consumers, and are
facing the universal issues of spiralling energy and food costs,
as well as compensating for inflation in their pricing.
Reflecting on London – falling from second to fourth place –
the report noted that Heathrow Airport, a crucial part of the UK
capital’s economy, miscalculated the speed with which people
would want to fly again after restrictions ended, and that it has
been hit by strikes and other dislocations.
