Asian cities top list of costliest places to live

The cost of living has been increasing for consumers across the world over the past 12 months, as the prices for all goods and services have increased by 13 percent on average in local currencies and by 6 percent if measured in U.S. dollars, according to the global wealth and lifestyle report 2023 released by Zurich-headquartered wealth management group Julius Baer on Tuesday.

The rising cost of living is largely due to prolonged high-flying inflation worldwide amid surging prices of raw materials, energy, fuel and staffing, explained Julius Baer experts.

For the fourth year in a row, Asia remains the costliest region to live in. In terms of global city ranking, Singapore this year became the most expensive city to live comfortably, while it ranked fifth a year ago, according to Julius Baer. Shanghai, which topped the ranking in 2022, came second this year. Hong Kong came third in the latest edition of the report, while it ranked fourth one year earlier.

Residential property is in extremely high demand in Singapore, and punitively taxed cars and essential health insurance are priced 133 percent and 109 percent higher than the global average respectively.

"Long considered liveable, stable and cosmopolitan, Singapore is now vying to become a leading global center for the wealthy. Determined efforts in financial regulation and government policy to attract high net worth individuals are clearly paying off with a doubling of family offices by the end of 2022 compared to the previous year," said Mark Matthews, head of research for Julius Baer Asia Pacific.

Although Shanghai remains an expensive city, average prices in local currency rose only 3 percent over the past year, being the lowest of all cities. This can be partly attributed to the impact of the pandemic. But Shanghai was the priciest city for business class flight and degustation dinners last year, according to the report.

Prices in luxury consumables have been driven up. Wine has reported the biggest 17.23 percent year-on-year price increase over the past 12 months, followed by the 16.15 percent increase of whisky and 15.25 percent rise for hotel suites. This is mainly because of the dramatically increased consumer demand over the past few months, which was once pent up during the pandemic.

Price rises in premium goods and services underpin the fact that wealthy consumers need to achieve a high single-digit investment return denominated in stable currencies so as to preserve their wealth, said Christian Gattiker, head of research for Julius Baer.

Looking at the financial habits of high net worth individuals globally, people are investing more, which, as Julius Baer experts explained, is perhaps a reflection of post-pandemic uncertainty. Again, Asia Pacific is in a leading position, with 73 percent of the respondents in this region directing more of their capital to investments.