London Overtakes Hong Kong in Luxury Spending Index 2025 - See Which City Is on Top

As global uncertainty mounts and high-end consumer habits shift, the world’s luxury capitals are being reshuffled in dramatic ways. The latest Julius Baer Lifestyle Index 2025 reveals a surprising reshaping of the elite spending map, and one city has just leapt ahead of its long-time rival.

Soaring prices in private education, airfare, and other lifestyle essentials are driving dramatic repositioning in the rankings of the world’s costliest cities for the ultra-wealthy.

This year’s report, compiled by Swiss private bank Julius Baer Group Ltd, evaluates 25 global cities based on the cost of premium goods and services — from residential real estate and luxury cars to gourmet dining and business-class travel.

Why Luxury Prices Fell for The First Time
In an unexpected twist, the average price of Julius Baer’s luxury goods basket declined by 2% — the first drop since the index launched in 2020. The bank described this as “quite exceptional,” noting that prices in this category have historically increased at twice the pace of regular consumer inflation.

Technology was cited as the biggest factor in driving down prices, though categories like business class flights bucked the trend, with fares rising 18.2% globally.

“In light of ongoing uncertainty, trade tensions, and tariffs, our findings represent the final moment ‘before’ the current situation,” said Christian Gattiker, Head of Research at Julius Baer. 

“Next year’s report will likely provide a fascinating ‘after’ perspective.”

The Surprise Surge: London Climbs to No. 2
London’s rise to the second spot, overtaking Hong Kong, is among the most notable developments in this year’s index. The city saw a 26.6% spike in private school fees and a 29.7% rise in business class airfare, driven by increased demand and new legislative changes impacting elite families.

However, London’s appeal wasn’t without turbulence. The abolition of the UK’s non-domiciled residency status in 2024 disrupted long-standing tax advantages for the ultra-rich, prompting many to consider relocating. Cities like Dubai, Milan, and Zurich are increasingly being seen as more welcoming havens for high-net-worth individuals.

“London’s wealth appeal had a rather turbulent ride over the past year,” the report stated, as rival cities rolled out red carpets for those seeking alternative homes.

Dubai’s Ascent and Singapore’s Steady Dominance
Dubai continued its strong momentum, rising five spots to 7th place, bolstered by tax-friendly policies and its booming luxury lifestyle sector. According to Julius Baer, the wave of millionaires relocating to Dubai — a trend that began during the pandemic — shows no signs of slowing down.

Who is on Top?
At the very top of the index for the third straight year is Singapore, still the most expensive city for luxury spending. Hotel suite prices alone rose 10.3% in the city-state, making it a preferred destination for wealthy consumers seeking safety, efficiency, and exclusivity.

“With the current unpredictable nature of the world, Singapore is valued for its stability and security,” the report noted.

Hong Kong Slips, Shanghai Sinks, and New York Holds On
Hong Kong, once a dominant luxury leader, fell to third place, impacted by declining prices in premium services and increasing competition from rival Asian hubs. Meanwhile, Shanghai, which topped the index in 2022, slipped to sixth, losing traction amid shifting economic winds.

In the Americas, New York held steady at eighth place and remained the only North or South American city in the top 10. In contrast, Sao Paulo tumbled seven spots to 16th, and Mexico City fell five places to 21st, reflecting regional volatility and slowing high-end consumption.

The World’s 15 Most Expensive Cities for Luxury Living in 2025
Rank                   City
1                    Singapore
2                       London
3                    Hong Kong
4                      Monaco
5                      Zurich
6                    Shanghai
7                       Dubai
8                    New York
9                     Paris
10                  Milan
11                Bangkok
12                Taipei
13               Miami
14               Sydney
15               Barcelona

Methodology and Outlook
The Julius Baer Lifestyle Index evaluates the cost of luxury living by analysing a range of goods and services relevant to high-net-worth individuals with at least $1 million in bankable assets. This year’s survey was conducted between February and March 2025, capturing a pivotal moment in global economic realignment.

As Gattiker summed up: “This year marks a transition. What comes next could redefine luxury itself.”

Read More - Loan Against Assets: Fixed Deposit, Gold, Or Stock-Backed? Key Options Explained

With luxury inflation slowing, geopolitical uncertainty rising, and new tax regimes emerging across Europe and Asia, next year’s list may look even more different — especially as cities like Dubai and Milan continue to attract the globally mobile elite.