The main concerns among the affluent are a contrast between financial stability and personal resilience, reveals our report. For those trying to toe the fine line between security and maintaining their lifestyle, what cities across the world have become the most expensive?
To accurately rank these cities, as in previous years, the report’s Lifestyle Index analyses the cost of a basket of goods and services representative of ‘living well’ in 25 cities around the world. This provides an overview of the relative cost of maintaining a high-net-worth lifestyle in various major urban centres.
The leader of the pack
The 2023 Index findings reconfirm Asia’s importance as a centre for the wealthy. It remains the most costly region in which to live well for the fourth year in a row. For the first time, Singapore is the highest-ranking city in the Lifestyle Index, followed by Shanghai – last year’s leader – and Hong Kong in second and third respectively, making up a fully Asian podium. The Taiwanese capital Taipei is the only other Asian city to feature in the top ten, taking the eighth spot.
For the first time since the report began, Europe, the Middle East, and Africa (EMEA) is the most affordable region in which to live well, with European cities in particular dropping down the rankings. London, last year’s second place, falls to fourth, and, apart from Monaco holding firm in sixth, Britain’s capital is the only European city in the top ten. Dubai has enjoyed a rapid rise up the ranking to seventh place, helping to relegate Zurich to Dubai’s former position of 14th.
In the Americas, New York makes a significant climb to fifth place from 11th and Miami rises eight places to tenth, while the Brazilian metropolis of São Paulo breaks into the top ten for the first time in ninth place . Santiago de Chile, newly added to the Index this year, joins in 23rd place. This return to form of both North and South American urban centres results in the Americas overtaking EMEA as the second most expensive region in which to live well.
Higher and higher
Compared to 12 months ago, the overall price for our Index of goods and services has increased on average by 13 per cent in local currencies and by 6 per cent in USD. As recession fears mounted during the second half of 2022, the safe-haven US dollar rose to unexpectedly high levels, exponentially weakening other major currencies such as the euro, Japanese yen, and pound sterling. This had particular influence when converting prices to USD for comparison purposes and is worth keeping in mind with regards to the analysis in this report.
The greatest price increases are in high-demand, premium consumables such as wine and whisky, as well as luxury cars and hospitality services. Hotel suites, business class flights, and fine dining all experienced significant price increases as the demand for travel and entertainment has surged. Overall, the cost of services grew more than the cost of goods, but across the board, price changes of both goods and services in the Index show the impact of increased energy, raw material, and staffing costs. Coupled with inflation, currency fluctuations, and ongoing supplychain disruption, these conditions mean that every industry, business, and consumer is feeling the effects on their purchasing power.
But what does that mean for the habits and attitudes of HNWIs globally? This year’s Lifestyle Survey, available in full via download, has been expanded to include North America, Singapore, and Qatar, and asks more in-depth questions about the health and wellbeing, sustainable practices, and financial situations of affluent consumers, enabling us to provide more nuanced analysis on these key themes.
More than ever, the results of the full report underline the importance of a robust wealth management strategy that can support the needs of both the individual and their families for generations to come.
You can explore the report below for the full index, survey results, regional overviews and more.