SINGAPORE has, for the first time, become the most expensive city for high-net-worth individuals (HNWIs) to live well, said a report by Swiss private bank Julius Baer on Tuesday (Jun 20).

In its Global Wealth and Lifestyle Report 2023, Asia remains the costliest region for HNWIs to live well for the fourth year in a row. Shanghai, the most expensive city in the ranking last year, took second place, while Hong Kong rose a spot to take third place in the Lifestyle Index ranking of 25 cities.

The Lifestyle Index is based on a basket of 12 consumer goods and eight services that represent discretionary purchases by HNWIs. The data was collected between November 2022 and March 2023.

Singapore’s ranking is likely due to the strong demand for accommodation, school places and a generally significant cost of living.

At a media roundtable, Julius Baer head of Asia-Pacific research Mark Matthews said Singapore’s rise to become the most expensive city may be a reflection of rising property prices as well as the high cost of owning cars in the country.

He noted that residential property has the biggest weightage in the index, followed by cars.

A NEWSLETTER FOR YOU

Tuesday, 12 pm

Property Insights

Get an exclusive analysis of real estate and property news in Singapore and beyond.

Sign Up

Speaking on the outlook for high-end property in Singapore, Chua Jen-Ai, a research analyst at Julius Baer, expects the latest round of property cooling measures will keep demand muted among wealthy foreigners.

While wealthy foreigners are likely able to afford an additional 60 per cent in Additional Buyer’s Stamp Duty (ABSD), Chua said the measures represent a signal from the government that it might not want to see much more demand in the high-end property sector in the short term.

She noted that the market is “pretty segmented”, however, and the mass market is largely unaffected by the 60 per cent increase in ABSD and remains relatively stable.

In Singapore, more than half of the items in the Lifestyle Index ranked among the top three most expensive regionally, although Singapore prices have not risen the most in the region on average, the report found.

Overall, 2023 has had the most balanced ranking in terms of regional diversity for the top 10 most expensive cities – comprising four cities from Asia, three from Europe and the Middle East, and three from the Americas.

Globally, wine and whisky saw the sharpest rise in prices, followed by hotels, flights and cars. With travel restrictions no longer an issue, travel for both leisure and work is rising and respondents are increasingly spending on flights, particularly in the Asia-Pacific region.

But Matthews noted that the overall price changes are more rational compared to the bigger price swings in 2022.

The report also found that fine dining and hotels are the biggest products and services that the HNWIs have spent more money on in the past 12 months.

In the Asia-Pacific region alone, 63 per cent of those surveyed said they spent more on fine dining, and 56 per cent said they spent more on hotels.

Matthews drew a comparison between the post-pandemic increase in spending on luxury consumables, to the decade of indulgence in the 1920s following the 1918 flu.

“There’s a bit of Great Gatsby in the air, just like the 1920s were full of revelry after the 1918 flu,” he said. “Maybe there’s something like that happening today: people realise that life’s too short or just want to enjoy themselves.”

The Lifestyle Survey also found that fitness and well-being practices, health insurance, education and family and financial resilience are top priorities for the HNWIs, to help prepare for future disruptions.

In particular, 54 per cent of respondents in the Asia-Pacific region said they spent more on health insurance in the past 12 months, likely because they are looking into their future more than they did before the pandemic, Matthews said.