Singapore Stands as Most Expensive Location for Elite Residential Spaces According to Recent Study
In a recent report by Julius Baer Group Ltd., Singapore has been named the world's most expensive city for luxury living for the third year in a row. Despite a global downturn, the city-state has managed to maintain its position due to a unique combination of factors that attract the affluent and drive up costs.
While Shanghai, the costliest city in 2022, fell to sixth place this year, Dubai rose to seventh, indicating that some cities are gaining ground in the global luxury market. The emirate jumped five spots due to an ongoing migration of global wealthy individuals since the Covid-19 pandemic, driven by economic uncertainty, rising interest rates, and geopolitical tensions.
London moved up to second place, with a 26.6 percent surge in private education costs and a 29.7 percent increase in business class flights. New York remains at number eight, the only American city in the top 10. Hong Kong remains the third most expensive city for luxe spending, with significant interest shown by wealthy individuals in its investment-for-residency program. However, hotel prices in Hong Kong dropped 26.1 percent.
In contrast, hotel prices in Singapore have risen 10.3 percent this year, indicating a high demand for accommodation in the safe haven. Singapore's status as the world's most expensive city for luxury living is driven by several key factors.
Firstly, Singapore tops the global rankings for the highest prices of luxury cars and women's handbags, and also ranks highly for women's shoes and residential property costs. These contribute significantly to the luxury living expenses faced by high-net-worth individuals (HNWIs) in the city.
Secondly, rising travel and lifestyle costs are another factor. Business-class airfares from Singapore have risen sharply by around 14.5% to 17%, reflecting strong demand and increasing costs of travel associated with luxury living. Private school fees and bicycle prices have also increased notably.
Singapore's appeal to wealthy expatriates and investors is another key factor. The city-state attracts affluent individuals through its stable political environment, safety, cleanliness, and excellent urban planning, as well as initiatives like the Global Investor Programme which draws non-resident population growth driven by rich newcomers.
The city's strategic location and connectivity also enhance its attractiveness. As a business hub in Asia with top-tier education and superior infrastructure, Singapore reinforces its appeal for those seeking both prestige and lifestyle quality.
Despite a significant drop in healthcare costs, luxury remains deeply entrenched in Singapore, with discretionary spending on private schools, luxury cars, and designer goods remaining very high. Being one of the world's most densely populated cities due to inflows of wealthy non-residents, the demand for limited luxury housing and exclusive amenities further drives prices upwards.
Christian Gattiker, head of research at Julius Baer, stated that the drop in luxury prices was "quite exceptional" as high-end consumer prices have traditionally risen twice as fast as average consumer prices. However, he anticipates next year's report will provide a "fascinating 'after' perspective."
Sao Paulo and Mexico City experienced the steepest declines and fell out of favor among the affluent elite, suggesting that the global luxury landscape is undergoing shifts due to economic and political factors. Despite these changes, Singapore's unique combination of stringent urban planning, effective governance, secured wealth inflows through investor programs, and a robust luxury market underpin its continued reign as the costliest city for luxury living.
- The city-state of Singapore, with its robust luxury market, maintains its position as the world's most expensive city for luxe spending, even in the face of global economic downturn, due to factors such as high prices of luxury cars, women's handbags, women's shoes, and residential property costs.
- Singapore's appeal to affluent individuals extends beyond its luxury offerings, as it also attracted investors through its stable political environment, safety, cleanliness, excellent urban planning, and initiatives like the Global Investor Programme.
- As a business hub in Asia with top-tier education, superior infrastructure, and a strategic location, Singapore remains attractive to those seeking both prestige and lifestyle quality, driving up costs in the fashion-and-beauty, food-and-drink, finance, and travel sectors.
