Monaco Ascends

THE PAST FEW YEARS have been defined by heightened geopolitical volatility, shifting economic alliances, and fluctuating financial markets. While markets are proving to be resilient, changes to global trade patterns, exchange rates, and the cost of raw materials are having a very real impact on daily life.

The Julius Baer Lifestyle Index tracks the price of a basket of 20 luxury goods and services—ranging from private school fees, healthcare, and residential property to watches, jewelry, and cars—across 25 cities globally. These cities are ranked from most to least expensive, with the index functioning as a comparative barometer of global wealth and living costs. For globally mobile individuals, it can also play an important role in understanding how currency, domicile, and lifestyle choices can impact financial longevity.

The 2026 edition captures a world that is not simply changing, but re-pricing itself in real time. This year's results point to a sharp acceleration in one of the most powerful, yet often underappreciated, forces shaping global wealth: currency. When viewed through a US dollar lens, which remains the reference point for the Julius Baer index, the implications are striking. The overall cost of maintaining a premium standard of living has risen by around 10 per cent, and the hierarchy of global cities has shifted accordingly. Yet beneath these headline figures lies a more nuanced—and ultimately more instructive—story about how wealth behaves in a fragmented, multi-speed world.

At the top of the ranking, continuity meets change. Singapore retains its long-held position as the most expensive city for high-net-worth individuals, underlining its structural strengths: stability, global connectivity, and the enduring premium attached to scarcity in land and mobility. But just behind it, the reshuffle is telling. Zurich rises to second place, and Monaco to third—both propelled less by local inflationary pressures than by the strength of their currencies. This distinction matters. It reminds us that in a globalized luxury ecosystem, local price stability does not equate to global affordability. More concretely, residents of Zurich or Monaco are unlikely to have been significantly impacted by their rise to the top of the podium, whereas for visitors with weaker currencies in their wallets, the change will not be lost on the global wealth. Here, exchange rates can dominate lived experience.

This year Monaco enters the top three of the Julius Baer Lifestyle Index for the first time. It stands apart as one of the most exclusive and concentrated centers of global wealth, offering a lifestyle and fiscal environment uniquely tailored to affluent individuals. Nestled along the French Riviera, the Principality combines Mediterranean elegance with a modern, highly efficient infrastructure, creating an environment where wealth and prestige intersect seamlessly.

What we see in Monaco is a combination of stability, connectivity, and financial depth that continues to resonate strongly with internationally mobile wealth. The Principality offers a predictable environment, supported by a favorable tax framework, which makes it an attractive base for structuring and preserving wealth over the long term. Its well-established financial center, which manages over EUR 170 billion in assets, reinforces Monaco's role as a premier destination for wealth preservation and management. At the same time, its strategic location on the French Riviera, with seamless access via Nice International Airport and proximity to major European cities, supports both business activity and cross-border lifestyles.

However, entry barriers remain high, requiring secured housing, established banking relationships, and proof of substantial financial means. Real estate is both a defining feature and a strategic asset. Scarcity of land and sustained global demand ensure that property values remain resilient, reinforcing Monaco's status as a long-term store of value. Indeed, Monaco is the most expensive place in our index to purchase residential property. This, along with the strength of the euro against the US dollar, has had a large effect on Monaco's rise in this year's Global Wealth and Lifestyle Index. Ultimately, choosing Monaco is as much an emotional commitment as a practical one. For those who call it home, the trade-offs are not compromises—but part of a distinctly refined way of living.

Turning now from the case of Monaco to broader market dynamics, another important driver this year is the resurgence of certain real assets—most notably gold. Rising input costs linked to precious metals are feeding through into luxury goods categories such as jewelry and watches, where price increases are pronounced. These categories continue to occupy a unique position at the intersection of consumption and investment. In uncertain times, their dual role becomes more visible: they are both objects of desire and stores of value. This dynamic reinforces a broader trend—namely, that wealthy individuals are adapting their consumption patterns in ways that increasingly reflect investment logic.

At the same time, the composition of price increases across goods and services provides further insight into the evolving nature of affluent living. Goods prices have risen more sharply than those for services, reversing some of the trends seen in previous years. This reflects a combination of factors: input costs, supply chain adjustments, and strategic pricing by luxury brands that are increasingly global in orientation. Many of these brands anchor pricing in stronger currencies, effectively exporting currency strength into global retail prices. This means that even purchases made locally can reflect financial conditions elsewhere.

Building on this perspective, the regional picture reveals further nuance. Europe remains one of the most expensive regions globally, driven by the strength of the euro and Swiss franc, with price increases across all cities averaging out at 14.1 per cent in US dollar terms, well above the 10.2 per cent global average. This year all but two European cities climbed our rankings, driven by the strength of regional mainland currencies. Barcelona remained in the same position as 2025. London, on the other hand, dropped due to a combination of the performance of the British pound and the relative increases in other cities.

Europe is the grand dame of our regions—long considered an attractive lifestyle destination and home to some of the world's most stable and appealing cities. However, its older demographic and more established economies result in less dynamism than in other regions. Investors in the region tend to be more conservative, favoring traditional asset classes, with funds, equities, and real estate taking the top three positions, with cash, bonds, and commodities following.

With slower economic growth, only 15 per cent of European HNWIs noted a significant increase in wealth over the past 12 months—among the lowest globally—though an additional 58 per cent reported modest asset growth. While 64 per cent of respondents reported investing more than in the past year, their primary motivation beyond wealth accumulation was wealth preservation, which is in line with the sentiments we see both from consumption patterns and behavioral reporting.

Habits, too, trend towards the conservative with spending contracting more than in any other region, particularly on items such as jewelry and watches, which are down 39 and 40 per cent respectively. That said, experiences such as fine dining and luxury hotel stays remained popular with 38 and 37 per cent respectively reporting that they had spent more on these categories than in the past 12 months.

We also see generally lower levels of engagement on financial topics in Europe, with only 39 per cent reporting that they have taken steps to plan their succession and only 14 per cent consider wealth education to be a high priority, both the lowest of any of our regions. This could, however, be interpreted as the result of families having already successfully integrated succession planning and wealth education into their wealth planning and management.

As with many of the data points for Europe, we see a region more settled in established patterns of behavior. Outlooks and consumption patterns remain conservative but as Europe begins to reassess its place on the global stage, there is considerable room for increased dynamism in the coming years.

Collectively, these observations lead to several key conclusions. First, it underscores the importance of thinking in real, not nominal, terms. A 10 per cent increase in USD-lifestyle costs does not necessarily imply a loss of purchasing power for all clients—but it does highlight the need to consider currency exposure explicitly. Second, it reinforces the value of diversification—not only across asset classes, but also across currencies. In a world where exchange rates can move faster than underlying prices, currency risk and opportunity are inseparable. Third, and perhaps most importantly, it highlights a shift in mindset. The affluent consumer is no longer a passive price-taker. Increasingly, we see active adaptation: choosing where to live, where to spend, and even where to purchase luxury goods based on relative value across jurisdictions. This mobility—both physical and financial—is becoming a defining feature of wealth in 2026. It also creates new opportunities, whether through geographic arbitrage or through strategic allocation to assets that benefit from currency trends.

Finally, this year's findings reinforce a broader message: we are operating in a more fragmented global economy. Regional dynamics are diverging, currencies are moving out of sync, and the traditional anchors of stability are being reassessed. In such an environment, the role of a trusted advisor becomes even more critical. At Julius Baer, our task is not only to interpret these shifts, but also to translate them into actionable insights—helping clients navigate complexity, preserve purchasing power, and identify opportunity.

By Albert Henriques

Contributor

Albert Henriques is CEO of Bank Julius Baer Monaco. Albert Henriques is a Contributor to The Monegasque™.