Singapore has been ranked as the most expensive city in Asia and the world’s most costly region to live in, according to the latest Global Wealth and Lifestyle report by Julius Baer. The report examines the spending patterns of high-net-worth individuals (HNWIs) and considers a basket of 12 consumer goods and eight services. It reveals that prices for these goods and services have increased by an average of 13 percent in local currencies and 6 percent in US dollar terms over the past year.
Mark Matthews, the head of research for Asia-Pacific at Julius Baer, highlights the long-standing reputation of Hong Kong and Singapore as livable, stable, and cosmopolitan cities. Both cities have implemented policies aimed at attracting affluent individuals, with Singapore’s financial regulations and government initiatives leading to a doubling of family offices by the end of 2022 compared to the previous year.
Singapore has risen to the highest-ranking city in the lifestyle index for the first time, surpassing last year’s leader, Shanghai, which now takes the second position. Hong Kong secures the third spot. The survey confirms that Asia has maintained its status as the most expensive region to live well for the fourth consecutive year, while HNWIs are increasingly focusing on preserving their health and wealth.
Respondents of the survey prioritize family health, improved nutrition, recuperation time, and fitness levels after enduring the pandemic. Across all five regions surveyed, expenditure on hospitality, including gourmet meals and luxury hotels, has increased. This trend is particularly prominent in the Asia-Pacific region, where more than half of the respondents have spent more on fine dining and hotels compared to the previous year.
Hong Kong has experienced significant price rises in goods and services, with hotel suite prices soaring by 102 percent and fine dining costs increasing by 45 percent. Despite a 2 percent decrease in residential property costs, housing in Hong Kong remains the priciest in Asia and the second most expensive globally. Additionally, the city is known for having the highest legal service prices in the world.
Shanghai, although still an expensive city, has seen relatively lower average price increases of only 3 percent in local currency, potentially influenced by ongoing pandemic restrictions. Shanghai tops the list as the priciest city for business-class flights and degustation dinners.
In Singapore, the cost of fine dining and premium whisky has risen by 33 percent and 24 percent, respectively, exceeding the regional average. Business class flights also saw a 44 percent average price increase.
Taipei is the only other Asian city to secure a place in the top 10, ranking eighth. New York has made a significant climb to fifth place, propelled by a strengthening US dollar, whereas cities in developed economies like Tokyo and Sydney have slipped down the rankings. On the other hand, cities in developing economies such as Bangkok, Jakarta, and Mumbai have seen an upward shift, with Mumbai rising from 24th to 18th place in this year’s lifestyle index.
For the first time since the report’s inception, the Europe, Middle East, and Africa (EMEA) region is considered the most affordable region to live well, with European cities dropping in the rankings. London, which held second place last year, now ranks fourth.
Globally, HNWIs are taking the opportunity to increase their investments, possibly due to post-pandemic uncertainties. APAC leads in this regard, with 73 percent of respondents indicating increased investment activities. Christian Gattiker, head of research at Julius Baer, emphasizes that rising prices of premium goods and services highlight the need for wealthy consumers to achieve high single-digit investment returns in US dollar terms to preserve their wealth. He also suggests that solid currencies, particularly assets denominated in currencies like the US dollar or Swiss Franc, can help individuals secure a healthier and wealthier future.
