The Julius Baer Global Wealth & Lifestyle Report 2024 reveals affluent individuals around the world are still willing to spend on their lifestyles, families, and futures, even against a backdrop of rising costs. Singapore and Hong Kong remain two of the costliest global cities for living well and are joined on the podium by London as Europe, Middle East, and Africa (EMEA) becomes the most expensive region. The report offers analysis for the mobile wealthy considering relocation, as well as affluent holidaymakers considering their next destination.
Inflation, rising living costs, and increased geopolitical tensions have been omnipresent in the news for the last few years, but the wealthy have had enough of the doom and gloom, according to Julius Baer’s Global Wealth & Lifestyle Report 2024. By analysing the relative changes in cost of a basket of goods and services, the report tracks the price of ‘living well’ in 25 prime global cities. This allows for two things: for residents of those cities to compare the respective lifestyle expenses, and for travellers to evaluate the affordability of various destinations.
This year’s principal finding is that, despite continued price increases, the wealthy are indulging in a new lifestyle boom as demand for leisure travel, fine dining, and luxury hotels across all regions featured surged in 2023, despite rising costs. As inflation rates have normalised over the past 12 months, the overall average price of the index of goods and services has risen 4% in US dollars.
These price changes differ by city, and, crucially, depending on local currency fluctuations, which in turn impact the city rankings. This year, the top-ranked cities are Singapore, Hong Kong, and London – the only new joiner on the podium having risen from 4th place, replacing Shanghai. In addition to London, every single European city featured has moved up the rankings meaning Europe, Middle East, and Africa (EMEA) is now the costliest region for living well. Most notably, Zurich climbed eight places to 6th, while Paris and Milan rose to 8th and 10th respectively.
Strong exchange rates have helped bring about this change in EMEA’s fortunes, but the region is also the most expensive for owning a home, while fine dining costs on average 13% more than other locations, and education is the priciest in the world. For the stylish, there is no let-up in fashion and luxury goods as rising raw material and labour costs have driven up prices of suits, shoes, and handbags. A marker of the sustained demand for luxury travel globally, the price of hotel suites has risen 11.3% in the last year – something no frequent flyers will have failed to notice.
Asia Pacific (APAC), formerly the most expensive region to live well, experienced mixed fortunes in the last year. Shanghai slipped from the podium due to faltering economic recovery from the pandemic and lacklustre consumer demand, while Tokyo plummeted 8 places to 23rd as the steady decline of the Japanese yen underlined that currency and context matter in these rankings. For luxury-loving globetrotters, Tokyo – which ranked second in 2021 – now represents a relative bargain destination, particularly given business class flights in the APAC region as a whole saw a 14% decrease in the last year.
While the Americas became the most affordable region for living well in this year’s report, both New York and São Paulo remain in the top ten, and Mexico City continues to climb (from 21st to 16th) on the strength of the local currency. Regionally, the Americas have seen the sharpest increase in the cost of hotel suites (+34%) yet within Latin America travellers are increasing their spend on business class flights significantly – up 45% in comparison to the previous 12 months.
It is the strong increase in spending by HNWIs on travel and hospitality in all regions that gives reason to believe we are seeing a roaring 20s-style return to fully embracing life and experiences. Business class flights are one of the few items to have fallen in price in the Lifestyle Index, likely part of the reason more than half of all HNWIs surveyed say they will travel more for leisure in the coming year, with the strongest demand coming from the Asia Pacific region.
Increased willingness to spend comes with increased ability to do so. Seventy percent of HNWIs surveyed saw an increase in personal wealth in the past 12 months. So, while the cost of ‘living well’ might continue to rise, those who prefer the finer things are increasingly able to indulge their tastes and habits.
Overall, the report paints a picture of people wishing to enjoy the finer experiences and products in life, even as the cost of doing so continues to increase. But, while the lifestyle budgets of the wealthy are significant, the strong desire to travel, socialise, and shop must be balanced by reinforcing financial structures to allow such levels of discretionary spending – history shows us the boom years are never guaranteed to last.
To read the full report please visit www.juliusbaer.com
