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Tuesday, October 4, 2016, 17:54

Shanghai leads Asia in luxury living costs

By Luo Weiteng

HONG KONG - Shanghai has retained its title as the most expensive city in Asia for luxury living, while Hong Kong still reigns as the leader in the cost of residential properties, according to a new survey.

In its 2016 Lifestyle Index, Swiss private bank Julius Baer tracked the price of 21 luxury goods and services, finding Shanghai as the most costly market for the second straight year amongst 11 Asian cities. It was the most expensive for hospital stays, watches, facial aesthetics, cigars and high-end skin cream.

It ranked second in the cost of residential properties, wedding banquets, ladies’ handbags, men’s suits, cars and ladies’ shoes. Legal fees and golf club memberships are the only two items that are cheaper in Shanghai, compared with others in the region.

Shanghai leads Asia in luxury living costs
Graphic by Alex Tang
Singapore was the second most expensive city, swapping positions with archrival Hong Kong, which dropped one place to third, mainly due to a slowdown in tourist spending. For the second year in a row, Mumbai in India remains the least expensive in terms of costs for wealthy individuals.

Hong Kong is the undisputed leader in the region for luxury real estate prices, with the average price of a 4000-square-foot home in a prime location costing $41.2 million. That is five times more than the average for Asia and comes even after prices fell by more than 8 percent from last year’s peak.

Julius Baer executive director Pearlyn Wong said a strong supply of luxury housing in Hong Kong would continue to keep property prices high. It would take Shanghai, where a high-end residential property costs an average of $16.5 million, some time to overtake Hong Kong.

Wong said hefty local taxes and duties are a major driving force in the Chinese mainland, which outweighs the concern over a weakening local currency as rich Chinese travel overseas to countries including Japan and South Korea to buy goods.

The sustained slump in the local currency and equity markets hasn’t dampened the appetite of wealthy Chinese for foreign luxury goods, as taxes and duties make prices on the mainland up to 40 percent higher than markets abroad.

However, Julius Baer head of business development Stefan Hofer said it is highly unpredictable whether markets like Japan and South Korea could benefit from such a huge demand in the next five years.

"The switch can be rather fast, not to mention more and more regional rivals are vying for a slice of the business, ratcheting up the already elevated competition,” he said.

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