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June 21, 2023 at 01:40 PM
Julius Baer’s latest Global Wealth and Lifestyle Report, published Monday, shows that the cost of living is increasing for all consumers. The average price of the firm’s Lifestyle Index has increased by 6% in U.S. dollar terms over the past 12 months, but by 13% in local currencies.
The report says this is because of persistent high rates of global inflation and more expensive raw materials, energy, fuel and staffing. In addition, consumer demand, pent up during the pandemic, has surged.
Julius Baer ranked 25 cities around the world by the relative cost of maintaining a high-net-worth lifestyle there. The ranking is based on the Lifestyle Index, which analyses the cost of a basket of goods and services representative of “living well” in those urban centers.
The analysis showed that the biggest price increases occurred in high-demand, premium consumables such as wine and in luxury cars and hospitality services. Hotel suites, business-class flights and fine dining all experienced significant price increases as the demand for travel and entertainment has surged.
“Price rises in premium goods and services underpin the case that wealthy consumers need to achieve a high single-digit investment return in U.S. dollar terms to preserve their wealth,” Julius Baer’s head of research Christian Gattiker said in a statement.
“These findings also support the insight that solid currencies and, in particular, assets denominated in such currencies (e.g., the U.S. dollar or Swiss franc) can help to weather these storms and secure a healthier, wealthier future.”
In the 2023 rankings, Asia solidified its dominance as a center for wealth and lifestyle, as well as an essential driver of the global economy. Overall, six Asian cities rose in the rankings, while four fell. In the Americas, four cities rose and one fell, while in the Europe, Middle East and Africa region, seven cities fell in the ranking and only one rose.
See the gallery for the 12 most expensive cities for maintaining a high-net-worth lifestyle, according to the report.
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