Singapore is known for its high standard of living, but also for its high cost of living. According to a new report, the city-state has become the most expensive city in the world for goods and services aimed at the wealthy, surpassing other global hubs such as Hong Kong, London and New York.
The report and its methodology
The report, titled "The Wealth Report 2023", was published by Knight Frank, a global real estate consultancy firm. The report tracks the spending habits and preferences of ultra-high-net-worth individuals (UHNWIs), defined as those with a net worth of more than $30 million.
One of the indicators used in the report is the City Wealth Index, which ranks 100 cities based on four factors: wealth, investment, lifestyle and future. The lifestyle factor measures the cost and availability of goods and services that cater to the affluent, such as luxury hotels, fine dining, private schools, golf courses and art galleries.
To calculate the cost of living for the wealthy, Knight Frank used a basket of 10 items that are commonly purchased by UHNWIs in each city. The items are: a business class flight from New York to London; a luxury car; a bottle of champagne; a watch; a handbag; a suit; a pair of shoes; a facial treatment; a personal trainer session; and a round of golf.
The findings and rankings
According to the report, Singapore topped the list of the most expensive cities for goods and services aimed at the wealthy in 2023, with a total cost of $28,715 for the basket of 10 items. This was an increase of 8.4% from 2022, when Singapore ranked second behind Hong Kong.
Hong Kong dropped to second place in 2023, with a total cost of $27,905, followed by London ($27,715), New York ($26,840) and Paris ($25,905). The cheapest city in the top 10 was Dubai, with a total cost of $18,340.
The report attributed Singapore's rise to the top to several factors, including its strong economic recovery from the COVID-19 pandemic, its attractiveness as a regional hub for business and investment, its limited land supply and high demand for luxury goods and services, and its relatively high taxes on imports and consumption.
The implications and outlook
The report noted that Singapore's high cost of living for the wealthy reflects its status as a global city that offers a high quality of life, a stable political environment, a diverse cultural scene and a vibrant innovation ecosystem. However, it also warned that Singapore may face some challenges in maintaining its competitiveness and attractiveness in the future.
Some of the challenges include rising geopolitical tensions in Asia-Pacific, increasing environmental and social pressures, growing inequality and social discontent, and potential changes in tax policies and regulations. The report suggested that Singapore may need to balance its economic growth with its social and environmental goals, as well as diversify its sources of wealth creation and innovation.
The report also predicted that the spending patterns and preferences of UHNWIs may change in the post-pandemic era, as they seek more sustainable and meaningful experiences, products and services. The report identified some emerging trends that may shape the future of luxury consumption, such as wellness and health care, digital art and entertainment, philanthropy and social impact investing, experiential travel and education.