For the Wealthy, Asia is the Most Costly Place to Live

According to Julius Baer’s ‘Global Wealth and Lifestyle Report’ 2021, Asia remains the most expensive area in the world for high-end luxury products and services.

The Julius Baer Lifestyle Index examines prices in 25 main cities around the world for a basket of products and services that represent the high-net-worth-individual (HNWI) lifestyle – ranging from residential property to laser eye surgery.

The most expensive area in the world is the Asia Pacific region, and the three most expensive cities in the world are Shanghai, Tokyo, and Hong Kong, though Shanghai has surpassed Hong Kong as the most expensive city in the world, the report said.

“Shanghai and Hong Kong are the 21st century’s equivalents of New York and San Francisco (as well as London and Paris in the previous century),” the report said. “From Europe to the United States to Asia, the torch has been moved on.”

When you look at Shanghai, you can see why it is the most expensive city in the world, according to the report.

Not only is it the great boomtown of the last two decades, but the report said it also commands a significant premium above the global average on many high-end products, ranging from treadmills and vehicles to degustation dinners and lawyers. These high rates are not counterbalanced by any of Shanghai’s bargains.

This year, the Americas is the most cost-effective area for leading a luxurious lifestyle, according to the report.

“This is mostly due to the US and Canadian dollar’s depreciation towards other big global currencies, as well as a dramatic depreciation of Latin American currencies,” the report stated. “Mexico City and Vancouver are two of the index’s most affordable cities. Just one American city (New York) remains in the top ten.”

In the 2021 index, Johannesburg has emerged as the most reasonably priced luxury destination. With the exception of London, which has risen in the rankings due to Brexit instability, all other cities in Europe, the Middle East, and Africa have risen in the rankings, boosted by the power of the euro and Swiss franc, according to the report.

“Just as it rebounded after the global financial crisis, we expect discretionary spending to recover when COVID-19 abates,” Julius Baer head markets & wealth management solutions Asia Pacific Rajesh Manwani said.

“During the pandemic-induced collapse in experiential spending, consumers temporarily reverted to buying goods over services. Yet even as borders closed, travellers turned to local destinations to satisfy their wanderlust, fuelling a domestic tourism boom,” he added.

“COVID-19 has raised consumer commitment to, and awareness of, buying ethically and sustainably, with many of
these changes in behaviour likely to endure long after the pandemic,” he concluded.

A mixed picture for Australia’s most expensive city

In Sydney, luxury shoppers should expect to pay a fair price for several of their favourite pieces.

The city ranked 14 in the global ranking (out of 23) and 7 in the Asia Pacific regional rankings (out of 10).

Prices are close to or below the world average when purchasing a treadmill, a dinner, or women’s fashions and jewellery, the report said.

Ladies’ shoes are less costly in Sydney, as they are elsewhere in this year’s Index. Cars, Lasik, men’s clothes, and watches, on the other hand, are more costly, contributing to a seven per cent increase in Sydney’s USD weighted average price.

However, the price of a business-class flight jumped 36 per cent in USD terms in 2020.

Because of the low number of new listings and consistent demand, Sydney’s property market has done well, with the median house price sitting at over A$950,000.

The ultra-luxury category was particularly resilient according to the report, with the third quarter of 2020 enjoying sales of properties at the top end increased by 94 per cent over the same period of 2019.

A house in the Sydney suburb of Vaucluse became Australia’s most expensive home to be sold at auction in September, fetching A$24.6 million.

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