Hong Kong beats Shanghai as Asia's most expensive city

Residential prices in the city soared to an average of US$51,595 psm.

Hong Kong moved up two ranks and beat Shanghai as the most expensive city in Asia in 2017, Julius Baer revealed in its annual Wealth Report.

The bank's Lifestyle Index revealed that Hong Kong is the most expensive city for property, fine dining, and business class flights.

Hong Kong's average price for high-end properties of US$51,595 per square metre (psm) towered over the regional average of US$19,151 psm, due to strong demand from customers and investors. The prices soared despite the government's home buying and cooling measures to boost residential supply and suppress housing demand.

"The primary market is particularly popular, with an abundance of new flats launched and developers offering various sweeteners to boost sales. Although the secondary market remained relatively quiet, a number of record-breaking deals have been recorded, resulting in further growth in home prices," the report added.

The announced 15% stamp duty levy on first-time homebuyers purchasing multiple flats in one go is not expected to drag down home prices, as these transactions make up less than 5% of total sales.

"Some developers could offer further sweeteners to counter the impact of the levy. While abundant upcoming supply and interest-rate rises will help suppress price growth, high land prices and strong housing demand will lend support to home prices," the report said.

Meanwhile, a fine dining experience in Hong Kong costs US$287, higher than the regional average of US$195. A flight from Hong Kong to New York of London costs US$6,264, higher than the average of US$4,749.

Hong Kong also ranked fifth in terms of the cost of eye laser with US$3,179, higher than the average of US$2,645.

The city also has the second most expensive hotel items with an average cost of US$987, way up above the regional average of US$602.

Meanwhile, Hong Kong's prices for jewellery and wine are some of the lowest in the region.

The price of wine, US$1,603, is the second lowest in Asia and is way below the average of $2,308. Julius Baer says the demand for wine is growing fast.

Hong Kong has the lowest cost of jewellery at US$39,909, below the average of US$45,027.