Hong Kong Is World's Priciest City - Julius Baer Study

Tom Burroughes

16 January 2020

Asia is the world’s most expensive region for luxury living and residential property, with Hong Kong top of the charts in spite of its political instability, putting the Americas and Europe into second and third place, respectively, according to a ranking produced by Julius Baer, the private bank.

The Swiss bank’s Global Wealth And Lifestyle Report 2020 put Hong Kong at the top out of 28 cities for cost, followed by Shanghai, Tokyo, New York and Singapore in second, third, fourth and fifth, respectively. At the other end of the scale, Mumbai was cheapest.

With Hong Kong’s currency pegged to the US dollar, some downward pressures that might be linked to the domestic disturbances in the jurisdiction have not made themselves felt, Julius Baer explained to this publication at a presentation on the results.

The health of the luxury goods sector is a barometer of how the wealth management industry fares more generally, shedding light on how willing high net worth individuals are to spend money, dig into their assets and focus their attentions. In a separate report, from Reportlinker, a group producing studies about certain sectors, it said that the global luxury goods market stood at nearly $324.59 billion in 2018. The global luxury goods market is projected to grow at a compound annual growth rate of 2.92 per cent between 2019 to 2025.

Conscious consumers
Separately, the report’s authors added to the chorus of ideas around sustainability and concerns about the environment, talking about the rising phenomenon of “conspicuous consumption”. Increasingly, it said, HNW individuals' purchasing habits are shaped by worries about global warming, sustainable business practices, human rights and the treatment of minorities, among other issues.

“Our analysis reveals the growing desire among consumers to balance their buying decisions with their social, environmental and political convictions. This began with the Millennials, but the baton definitely has been passed down the generations now,” Nicholas de Skowronski, head of wealth management solutions at the bank, said.

“The conscious consumer is here to stay, and we see a fast evolution of existing offerings and and major investments into innovations across industries as a response to growing demand.”

Among the findings, the report said that Europeans and North Americans are least likely to pay a premium for “responsibly” produced goods, because strict rules already provide assurance on “ordinary” goods. Consumers in Asia and Latin America are more inclined to choose a product on its sustainability credentials,” it said.

The Julius Baer Lifestyle index surveyed prices of 20 premium goods and services in 28 cities: 10 in Asia, 12 in Europe, the Middle East and Africa and six in the Americas. Hong Kong, as previously mentioned, is the most expensive, above the 90th percentile for property, beauty services, fine dining, business class flights and legal fees.