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5 Items That Contributed To Singapore Being The Most Expensive City In The World (According To A Consumer Report)

Business class flight tickets have gone up by 47%.

The 2023 Global Wealth and Lifestyle Report by private bank Julius Baer ranked Singapore, which is home to an increasing number of high-net-worth individuals (HNWIs), as the most expensive city in the world. The report provides an overview of the relative cost of maintaining a high-net-worth lifestyle across a basket of goods and services in 25 major cities around the world.

Since the report’s inception in 2021, this is Singapore’s first podium finish compared to its fifth-place ranking last year. It is followed by Shanghai, which held the top spot for the past two consecutive years, and Hong Kong, in second and third place, respectively.

Among the basket of 12 consumer goods and 8 services used to derive the Lifestyle Index, we examine the top 5 items that contributed to Singapore’s ascent as the most expensive city.

How The Julius Baer Lifestyle Index Is Derived

The Julius Baer Lifestyle Index is derived by comparing the cost of a basket of goods and services representative of ‘living well’ in 25 cities around the world. This is meant to give an overview of the relative cost of maintaining a high-net worth lifestyle in various major urban centres.

Of the 12 consumer goods and 8 services that the Index analyses, the highest weightages are given to residential property at 20% and cars at 10%. This is to reflect the relatively higher price and lower purchase frequency of these items. As for the remaining 70% weightage, it is evenly distributed across the rest of the items.

While Singapore has more than half the items in the Lifestyle Index in the top 3, prices have not risen by the most compared regionally. For instance, the price of cars – Porsche Taycan, which are 133% more expensive in Singapore compared to the global average, was highlighted to have dropped by 6% year on year (in US dollar terms).

Hence, for the remainder of the article, we will focus on the items that have seen a significant year-on-year increase in price in Singapore.

Read Also: Explaining Why Cars In Singapore Are So Expensive

#1 Business Class Flight (up by 47%)

The highest year-on-year price change of about 47% was seen for business-class flight tickets. This may come as no surprise as more of us, not just the affluent consumers, start travelling with the easing of the pandemic control measures.

With most airlines not fully resuming their flight services, demand has surged ahead of supply, leading to higher flight ticket prices. The report used the lowest published business class ticket prices for non-stop flights from Star Alliance airlines, which includes our national carrier Singapore Airlines (SIA) among 25 other airlines to major regional hubs such as Singapore, London, or New York.

Compared to the 25 major cities, Singapore ranks third most expensive for business-class flight tickets, with Shanghai taking pole position and Barcelona being the cheapest.

Read Also: 10 Popular Travel Destinations For Singaporeans And The Best Time To Book For Cheaper Flights

#2 Treadmill (up by 46%)

A surprise entry to this list is a lockdown favourite – the treadmill, which saw a year-on-year increase of 46%. This ties in well with the overall theme of HNWIs prioritising their health and wellbeing on the back of the coronavirus.

Participants in the survey reflected purchasing home gym equipment (such as treadmills), gym memberships, and wellness treatments as popular areas of health and fitness spending. While the survey did not indicate the type or brand of the treadmill, it suggested a global increase in costs as a result of higher prices for raw materials.

Despite the surge in prices of treadmills in Singapore, it is only the 11th most expensive city among the 25 global cities, with Sao Paulo topping the list and Vancouver rounding off the list as the least expensive city.

#3 Wine (up by 30%)

One of the two luxury consumables that saw the biggest price increases is wine, which is up by 30% year-on-year. Typically, high-end wines have considerable rarity value and limited supply, which may drive their prices up due to collection, investment, and speculation reasons. Furthermore, the report hinted that raw materials—grapes—are becoming more expensive as grape harvests increasingly suffer from the effects of climate change, reducing supply.

The Lifestyle Index used a 750ml bottle of Château Lafite Rothschild 2018 vintage for their benchmark pricing, which costs S$1,650 (inclusive of 8% GST) according to the Wine-Searcher website.

Even with the 30% increase in price, Singapore is only the 13th most expensive city. On the other hand, the most expensive is Sydney, while Tokyo is the cheapest city to have your fine wine.

Read Also: Wealth And Sin Taxes: Why Singapore Budget 2023 Raise Taxes For Those Who Own Expensive Properties, Luxury Cars, And Smoke Tobacco

#4 Whisky (up by 19%)

Another premium consumable that had a large price increase globally due to high-demand and limited supply is whisky. In Singapore, prices are up 19% year-on-year.

Unlike wines, there is no mention of how the price of whisky was derived for comparison in the report. However, similar to wine, whisky also has rarity value, leading to collection, investment, and speculative moves by affluent consumers that drive their prices higher.

Singapore ranks as the second-most expensive city for whisky, with Sao Paulo taking the top spot, while Mumbai is the least expensive city.

#5 Degustation Dinner (up by 14%)

Rounding off our list is degustation dinner, also known as the chef’s tasting menu, which has gone up by 14% year on year. Universally, food inflation remains elevated due to the political tensions between Russia and Ukraine, which have affected food supply chains globally.

The report based the prices of degustation dinner on the top two restaurants and, where possible, restaurants with three Michelin stars in the city. A check on google shows a 9-course degustation dinner in Singapore to costs upwards of $300 per pax.

Among the list of 20 cities, Singapore ranks as third most expensive behind Shanghai, which took top spot, while Johannesburg is the least expensive city to have a fine dinning meal.

How Should We Interpret These Consumer Reports

If you are one of the 526,370 (as of 2021) high-net-worth-individuals (HNWIs) in Singapore, this may give an indication of the likely cost of high-end consumption that you might indulge in.

For instance, the report mentioned that while typically affluent consumers faced double the rate of inflation (8% in 2022) of the average consumer, the Lifestyle Index only rose by 6% due to the unexpectedly strong US dollar. Hence, as a HNWI individual, you may need to achieve a high-single-digit investment return in US dollar terms to preserve your wealth.

For the rest of us, average consumers, we are unlikely to consume the basket of goods and services that the Lifestyle Index is based on. Furthermore, the report is based on US dollars and does not factor in the strong Singapore dollar, which helps dampen imported inflation in Singapore by lowering our cost of imports, which in turn leads to lower consumer prices.

Additionally, the government supports households and lower-income individuals through various targeted schemes, such as the permanent GST voucher scheme and cost of living payouts under the Assurance package. This helps to lower and manage our cost-of-living expenses. Hence, we should take these consumer reports with a pinch of salt, as they are intended for a niche audience group.

Read Also: How Budget 2023 Helps Singaporean Households Deal With Inflationary Pressures And The GST Rate Increase

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