Asia-Pacific remains most expensive region for rich, study shows

The Asia-Pacific remained the most expensive region for wealthy people, with Shanghai, Tokyo and Hong Kong the three most expensive cities in the world for the rich, according to Swiss private banker Julius Baer.

The Europe, Middle East and Africa region was in second place, the lender’s Global Wealth and Lifestyle Report for

this year showed.

The Americas are now the cheapest region for high-networth people, who are described as having more than $1 million in investable assets. Dubai climbed five positions to be ranked the world’s 12th most expensive city for wealthy people.

“The change in Dubai’s ranking is due to a number of factors, including the removal of some cities from the index, a large fall in prices for some cities in Americas due to currency weakness, the rejigging of the index composition and overall price increases for Dubai index items,” said Mark Matthews, head of Asia Pacific research at Julius Baer.

The Zurich-based lender compiled an index using a basket of consumer goods and services that represent discretionary purchases by HNWIs – ranging from residential property to laser eye surgery – and analysed costs in 25 key cities around the world.

The number of ultra-high-networth people – those with more than $30m in investable assets – in the Middle East is expected to grow by 24.6 per cent in the next five years, according to a February report by property consultancy Knight Frank.

The region will remain the fourth-largest wealth centre in the world, the report said.

The wealth manager changed the composition of the second edition of the Lifestyle Index to reflect evolving consumer tastes after Covid-19.

Wedding banquets, pianos, beauty services and personal trainers made way for new items such as bicycles, treadmills, technology packages and health insurance.

Overall, the price of goods and services in the basket registered an increase of only 1.05 per cent globally, Julius Baer said. Most index items in Dubai are priced at the international average or higher, the report showed.

The luxury categories with the biggest price falls were ladies’ shoes (11.7 per cent) and hotel suites (9.3 per cent). The biggest gains were in business class flights (11.4 per cent) and luxury watches (6.6 per cent).

“The relatively strong performance of Asia was driven by a broad variety of reasons,” said Mr Matthews.

“Covid-19 did not become an epidemic in Shanghai, Tokyo, Hong Kong, Taipei, Bangkok and Singapore the way it did in most other cities in this index.”

However, there are outliers such as India’s commercial capital Mumbai, according to the index. Residential property costs less than half the global average in this Indian city and the only expensive items are cars.

The price increases in Europe, the Middle East and Africa were primarily driven by currency changes.