Asia Pacific dominated the most expensive cities for high net worth individuals to live in, according to a recent Julius Baer report on the global lifestyles of the wealthy.

Four out of the top 25 cities by costliness for HNWIs were located in Asia, according to Julius Baer’s Global Wealth and Lifestyle Report 2021. 

Shanghai led the ranks, dethroning Hong Kong which fell to third place from the top spot last year. Tokyo ranked second and Taipei ranked fifth. Other Asian cities in the list include Singapore (9th), Bangkok (11th), Manila (16th), Jakarta (20th) and Mumbai (22nd)

The rankings were based on a lifestyle index with up to 20 categories of goods, services and experiences represented as constituents. 

APAC Dominance

According to the report, Asia continues to be the most expensive region for the wealthy due in part to a strong response to the coronavirus crisis, currency stability and price resilience for the index items.

In addition, property prices, which make up 20 percent of the index, continue to be relatively high, further driving up the cost of living for HNWIs.

Cheaper To Be Rich

Despite Asia’s high ranking, movement in the cost of living for wealthy individuals over the years has been relatively moderate.

Since 2013, Julius Baer’s lifestyle index has trended well below the broader Asian consumer price index. In the case of Singapore and Mumbai, the nominal cost of living for HNWIs has actually declined during this period.

Behavioral Evolution

Prices aside, HNWIs’ consumption behavior worldwide has undergone significant change as a result of the pandemic. 

Experiential spending has risen as shoppers shift discretionary spending from goods towards «memorable trips, events and experiences» such as fine dining.  

«Conscious Consumption»

The report also highlighted the rise of «conscious consumption» as shoppers limit spending in historically conventional areas and increasing focus elsewhere.

For example, buyers are avoiding traditional luxury cars and fast fashion in favor of electric cars and local goods. 

«This year [conscious consumption] has gone mainstream, becoming a central theme in nearly every sector,» said Nicolas de Skowronski, Julius Baer’s head of wealth management solutions and member of the executive board.