(Bloomberg) -- Singapore surged to top the rankings as the most expensive city in the world for luxury living for the first time as it vies to be a leading global center for the rich.
The city-state, ranked fifth in 2022, leapfrogged ahead of Shanghai and Hong Kong, which are in second and third spots respectively, according to a report by Swiss wealth manager Julius Baer Group Ltd.
One of the first places in Asia to reopen its borders during the pandemic, Singapore’s attractiveness to high-net-worth individuals is reflected in rising prices that locals now face. By the end of 2022, Singapore counted an estimated 1,500 family offices in the territory, twice the number of the previous year, according to the report. It’s the most expensive city globally for car prices.
“High living standards and ballooning demands on local infrastructure mean life here does not come cheap,” according to the report released Tuesday. “Residential property is in extremely high demand, and punitively taxed cars and essential health insurance are 133% and 109% more expensive than the global average respectively.”
Julius Baer’s Lifestyle Index ranks the world’s 25 most expensive cities by analyzing residential property, cars, business class flights, business school, degustation dinners and other luxuries. Asia remained the most costly region for luxury living for the fourth straight year.
New York was another big gainer. The US financial capital rose to fifth from 11th last year, due to a strengthening dollar and a rebound from the pandemic.
London slipped to fourth place from second. Brexit and its “ensuing turmoil” continue to dent the UK’s reputation and the city now faces strong competition from burgeoning financial centers such as Dubai and Singapore, according to Julius Baer.
For the first time since the report began, Europe, the Middle East and Africa is the most affordable region to live well in, with European cities dropping in rankings.
Dubai vaulted into the top 10 for the first time, becoming the seventh most expensive city, as Zurich slid to 14th place. The Emirate is a “star performer” in this year’s index, and the relocation of large numbers of wealthy individuals has affected property prices and demand, said Julius Baer.
Pedestrians walk by luxury goods shops at Orchard Road. Photographer: Edwin Koo/Bloomberg
The survey found rising demand for travel and entertainment as pandemic restrictions were lifted and freedom returned. The cost of luxury items such as wine, benchmarked by a bottle of Château Lafite Rothschild 2018 vintage, and whiskey globally surged the most by 17.2% and 16.2%, respectively.
“A lot of people are still in post pandemic party mode,” said Mark Matthews, head of research Asia-Pacific at Julius Baer, at a media briefing on Tuesday.
Other big gainers included hotel suites and business class flights. There were some exceptions though. The prices of bicycles, which became “hugely expensive” during the pandemic, dropped by 1.8%.
Julius Baer surveyed high-net-worth individuals with bankable household assets of $1 million or more between February to March 2023.
(Adds comment from media briefing in 11th paragraph)
--With assistance from Cherian Thomas.