Julius Baer has released its seventh annual Wealth Report: Asia, which tracks luxury expenditure trends of Asia’s High Net Worth Individuals and the opportunities ahead for the wealth management industry. According to this year’s report, Hong Kong displaces Shanghai as the most expensive city.
The report shows that the cost of luxury living, as measured by the Julius Baer Lifestyle Index, rose by 1.42% on an aggregate basis in USD terms, compared to a 1.68% contraction in 2016. This upward trajectory of the index points to sustained demand for luxury goods and services in Asia. More specifically, 13 out of the 22 items measured in 11 Asian cities saw price increases.
Hong Kong has jumped two places to become the most expensive city on a price-weighted basis for the first time since the report started to publish city rankings in 2015. While the overall basket of goods and services in Hong Kong rose by 1.0% only, the city’s ranking was pushed up by soaring residential property prices with property being the biggest ticket item in the index. At USD 51,594 per square meter, Hong Kong prime real estate is 2.69 times more expensive than the Asian average at USD 19,150 in this year’s report. Hong Kong is also the most expensive city for fine dining and business class flights.
Jimmy Lee, Head Asia Pacific of Julius Baer Group Ltd., said: “Wealthier Asian consumers and their increasing discretionary spending play an ever more important role in driving global consumer demand. Our report has provided valuable insights into these developments for the last seven years with a view to helping investors look beyond short-term markets.”