Asia remains the most expensive region in the world for high end consumer goods and services, Julius Baer revealed in its second ‘Global Wealth and Lifestyle Report' 2021.
More than a year on from the beginning of the global pandemic, the report's Lifestyle Index highlighted how high-end consumer consumption has changed, with COVID-19 raising consumer commitment to, and awareness of, buying ethically and sustainably.
This year's changes to the basket of goods and services largely benefited those living in Asia-Pacific countries, where the new items tend to be cheaper, the report said.
"Despite this, Asia remains the most expensive region partly because of the region's swift recovery from the global health crisis, currency stability, and price resilience for the index items.
"Shanghai is now the most expensive city in the index, clinching the top spot from Hong Kong. Tokyo and Hong Kong are the second and third most expensive cities respectively - yet the picture remains mixed with Mumbai still one of the places where wealth goes furthest."
By contrast, the Americas are the most affordable region to live a luxury lifestyle this year, mostly attributed to the price of the US and Canadian dollars falling against other major global currencies, and a sharp devaluation of currencies in Latin America.
Mexico City and Vancouver are amongst the most affordable cities in the index, while just one city - New York - remains in the top 10: "This region is the most expensive place for healthcare but personal technology remains affordable, as the US is home to many of the world's tech titans", the report added.
Johannesburg emerged as the most well-priced place for luxury in the 2021 index, the only African city represented in the index, and one of few cities to experience significant price falls over the past year as the South African rand depreciated significantly.
All of the other cities in EMEA have risen up the rankings, buoyed by the strength of the euro and the Swiss franc, except London, due to Brexit uncertainty.
London is one of the cheapest places to buy fine whisky, due to its geographic proximity to Scotland and Ireland, but it is also the third-most expensive place in the Index to buy residential property.
EMEA was appreciably more expensive than the Americas, which cheapened considerably due to currency fluctuations.
The collapse of global tourism in 2020 had a significant impact on this year's index. In Asia, Bangkok and Singapore have both slipped down the rankings, while the dearth of travellers has also hit many European cities.
The luxury categories that have seen the biggest falls in prices in USD terms are ladies' shoes (-11.7%) and hotel suites (-9.3%). The biggest gains are in business class flights (+11.4%) and whisky (+9.9%).
Rajesh Manwani, head markets & wealth management solutions APAC of Julius Baer, said: "While there were regional differences, overall the price of our basket reflecting the lifestyle of wealthy individuals around the world showed an increase of just 1.05 per cent. Asia continues to be the most expensive region in the world for high- and ultra-high-net-worth individuals - a testament to the continent's ongoing rise."
Nicolas de Skowronski, head wealth management solutions and member of the executive boards of Julius Baer said: "As in previous years, the data of Julius Baer's Lifestyle Index 2021 points to two clear conclusions for those looking to preserve their wealth. The first is to invest; inflation and other factors such as exchange rates and local regulations can play a huge role in the purchasing power of your wealth. Knowing your local or even personal inflation rates and secondly adopting the right wealth management and planning strategies are essential to preventing a real-term erosion of wealth over time."
