WM Market Reports

Asia Is Costliest Region For Living Well; EMEA Now Cheapest – Julius Baer Study

Tom Burroughes Group Editor 21 June 2023

Asia Is Costliest Region For Living Well; EMEA Now Cheapest – Julius Baer Study

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.

“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.

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. 

Asia running hot
Hotel suites, business class flights, and cars have seen the highest average rises of all regions: hotels by 39.1 per cent, flights by 32.9 per cent, and cars by 25.2 per cent, the report said. 

Julius Baer said there are “surprising pockets of affordability such as ladies’ shoes (+5.7 per cent), jewellery (+4.5 per cent), and watches (+4 per cent), as well as bicycles (+3.2 per cent), that have seen lower rises than average. Residential property also showed only small increases – although actual purchase costs in many cities remain high.

The jurisdiction in the UAE is getting known as a hotspot for HNW individuals in the Middle East.

“Dubai is the star performer in this year’s Lifestyle Index, vaulting into the global top ten for the first time, directly switching places with Zurich,” the report said.

“Indeed, within the EMEA region it is now the third priciest city, after London and Monaco. Of course, this climb up the rankings means it is costing wealthy residents more to maintain their lifestyles – the city became the most expensive in EMEA for eight of the 20 Index items, notably fashion and luxury accessories, while globally it is the second most expensive city for watches (after São Paulo).


We want to party
Perhaps unsurprisingly after years of lockdowns and other constraints, the report showed that people want to get out and live well – even if it costs more.

“Taking care of family and health does not mean that HNW individuals just want to stay at home. After several years of being constrained in what they can do and where they can go, they – like everyone else – are ready to enjoy themselves,” the report said. “This means increased demand for entertainment, hospitality, and social experiences. They also want to treat themselves to luxury goods and premium services, as well as racking up air miles in a pronounced return to the skies.”

“We see that spending on hospitality (gourmet meals and five-star hotels) has risen in all five regions surveyed in the past 12 months and is particularly strong in APAC and the Middle East. More than half of respondents in APAC have spent more on fine dining and hotels, while in the Middle East 74 per cent of respondents say they spent more on fine dining and 69 per cent spent more on five-star hotels.”

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