They may be separated by La Manche, but in terms of luxury lifestyle, prime real estate and world-class retail, Paris and London are two peas in a pod. Paris, wrote Voltaire in 1735, is “the whipped cream of Europe.” From Marie Antoinette’s rule at Versailles to queen of fashion Coco Chanel’s reign over haute couture, the City of Light became, over time, an ever-more decadent feast. But no writer lavished such praise on London back then. The British capital was to enjoy the spoils of “luxury” far later, discovering its more frivolous side only after the death of Queen Victoria in 1901. Once high society had swapped black mourning clothes for finer fabrics and color, the city finally found its joie de vivre.

The British Empire’s global reach meant money was flooding in, and the city was booming with a new breed of professional who had cash to splash. Influenced by Belle Epoque Europe, grand hotels such as The Ritz, theaters, music halls, and department stores opened their doors to affluent consumers under the influence of the new king, Edward VII – the man who set the trend for tweed and popularized black ties with dinner jackets, instead of white tie and tails.

London was always heavily influenced by Paris. Luxury living in the French capital began in Saint-Germain and Saint-Honoré from as early as the 1700s, where financiers built hôtels particuliers: freestanding mansions with their own courtyard gardens. Urban transformation came to London in the 1820s with John Nash’s development of Regent Street, one of the first streets devoted to high-end retail.

Today, London has well and truly caught up with Paris as a global capital of luxury, and both continue to thrive. According to the Christie’s International Real Estate Index for 2012, London comes out top with more than 7,700 properties on the market priced above $1 million (with the highest recorded sale at $121 million), while demand for luxury homes in Paris has outstripped supply.

Thomas Kochs, general manager of London’s five-star Claridge’s hotel, says the capital epitomizes luxury: “There are few places in the world where you have access to such quality brands, craftspeople, and artists. It’s also a city where a real sense of tradition meets the cutting edge and contemporary.”

And you don’t have to venture far from the comfort of the hotel to enjoy the best of the capital, says Kochs: “I’d head to Drake’s on Clifford Street to add to my collection of handmade British ties, and Hedonism Wines to indulge my love of Bordeaux. After that, have a martini at the Connaught Bar before heading off to Cecconi’s for an early dinner.”

For those looking to invest, James Forbes, a partner at Strutt & Parker, an exclusive affiliate of Christie’s International Real Estate, says: “One of the most desirable properties in London in recent months would have to be a rare first-floor lateral apartment in Cadogan Square. This type of flat may only come on to the market once in a generation.” He also advises keeping an eye on Victoria (home to designer Tom Ford’s London HQ) as an up-and-coming area.

Luxury shopping in London has never looked better. Flagship boutiques from some of the world’s best brands have now opened, among them the Alexander McQueen shop on Old Bond Street, the new, fully interactive Regent Street Burberry store, and the Chanel boutique on New Bond Street – the label’s largest presence anywhere in the world.

Paris or London? It’s an impossible choice. But thanks to a 42-minute NetJets flight or short hop on the Eurostar, one can wake up under Claridge’s crisp Pratesi sheets and watch the sun set from the terrace of Le Meurice’s Belle Etoile Royal Suite, while raising a glass to the men and women of the Belle Epoque who made such enduring glamour possible.