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Singapore. (Photo: Swapnil Bapat/Unsplash)
Singapore has emerged as the most expensive city in the world for high-net-worth individuals (HNWIs), according to this year’s edition of the Global Wealth and Lifestyle Report 2023 by private bank corporation Julius Baer, which was released last week.
The city-state’s ascent to the top position can be attributed to skyrocketing property prices driven by an insatiable demand for residential real estate. With residential property constituting the highest weightage of the calculations for the ranking, Singapore’s luxury housing market played a pivotal role in securing its position.
The report also reveals that cars in Singapore are 133 percent more expensive than the global average. This makes Singapore the most expensive city to own an automobile, and exorbitant prices can be attributed to the imposition of punitive taxes on vehicle purchases, the report notes.
Singapore’s climb to the top
Evolution of the top ten most expensive cities from 2021 to 2023. (Photo: Julius Baer/Global Wealth and Lifestyle Report 2023)
Singapore’s steady climb to the top of the charts is noteworthy. Just a year ago, the Republic came in fifth position, while it was ranked 9th in 2021.
This rise highlights Singapore’s appeal as a prime destination for the wealthy. The country has experienced an influx of affluent residents in recent years, attracting attention from Chinese buyers who have been acquiring luxury condominiums. Moreover in 2022 alone, approximately 2,800 HNWIs migrated here, according to the Henley Private Wealth Migration Dashboard.
“Determined efforts in financial regulation and government policy to attract HNWIs are clearly paying off with a doubling of family offices to 1,500 by the end of 2022 compared to the previous year,” says Mark Matthews, Head of Research Asia Pacific at Julius Baer.
Asia’s dominance as a centre for wealth
Shanghai. (Photo: Zhou Xian/Unsplash)
Besides highlighting Singapore’s prominence among HNWIs, the report also shows the significant role Asia plays as a hub for the wealthy.
Shanghai, which topped the list last year, is the second most expensive city in the 2023 list, standing out as the priciest destination for business class flights and degustation dinners.
Taking the third spot is Hong Kong, which has emerged as a city grappling with substantial increases in the prices of hotel suites and fine-dining experiences.
The region has also witnessed a remarkable resurgence in tourist demand, leading to a surge in prices within the hospitality industry. However, compared to other cities, Hong Kong faces the challenge of higher operational costs, primarily attributed to factors such as labour shortages.
Additionally, car prices in Hong Kong have experienced a significant increase of 30% and housing in the city continues to be the most expensive throughout Asia, the report adds.
Pent-up demand for travel and hospitality services
Global price changes compared to 2022. (Photo: Julius Baer/Global Wealth and Lifestyle Report 2023)
As the world recovers from the effects of the pandemic, the pent-up demand for travel and hospitality services has strengthened. Consequently, it comes as no surprise that hotel suites and business class flights have all witnessed price increases of 15% and 10% respectively.
In addition, there has been a notable surge in prices for premium consumables across the board. Items such as wine and whisky have experienced price hikes of up to 17% as well.
Increased spending on health insurance and ride-hailing services for Asia
Photo: Fikri Rasyid/Unsplash
Though interestingly, for the Asia-Pacific region, HWNIs have shown a willingness to spend up to 54% more on health insurance compared to pre-pandemic times.
“This inclination may stem from a heightened focus on securing their future and prioritising their well-being amidst the uncertainty brought about by the global health crisis,” Matthews shares.
The Asia-Pacific region has also witnessed the strongest increase in the utilisation of chauffeur and ride-hailing services too, the report writes. Notably, Grab, a prominent player in the region’s ride-hailing industry, experienced exceptional growth, with revenue soaring 130% year-on-year to an impressive $525 million in the first quarter of 2023.
The Julius Baer Lifestyle Index measures the cost of a basket of goods and services associated with the affluent lifestyle of HNWIs in 25 major urban cities. The basket includes the prices of residential properties, cars and hotel suites, among other indulgences.
While there is no universally agreed-upon threshold, HNWIs are generally defined as individuals with a net worth exceeding $1 million, excluding their primary residence, typically measured in terms of liquid assets, investments, and other financial holdings.
