Dubai fell two spots to rank 14th most expensive city across the world for high-net-worth individuals (HNWIs), according to a report by Julius Baer.
The third edition of Julius Baer’s Global Wealth and Lifestyle Report, centred on a basket of 12 consumer goods and eight services, reflects the spending patterns of HNWIs, and highlights the changes in the cost of living well, after analysing the price development of the basket in 24 cities around the world.
The effects of the Covid-19 pandemic combined with a set of macro-economic conditions and supply chain disruptions, has caused price rises for 75 per cent of the goods and 63 per cent of the services in the index. The weighted average of prices increased by 7.46 per cent in the last year, compared to an increase of only 1.05 per cent in the previous edition of the report.
Dubai continued to receive tourists during 2021 – driven by a combination of pent-up-demand as travel reopened, the effect of Expo 2020 Dubai, and other factors. The city also witnessed a 44 per cent growth in residential property prices with short-term rentals and holiday homes on an upswing, the report added.
Besides ranking 14th globally, Dubai ranked sixth across Europe, Middle East and Africa (EMEA). However, it ranked as the most expensive city globally to study for an MBA and within the EMEA region, the most expensive city to buy a car, a men’s suit and a watch.
Shanghai occupied the first spot on the index, ranking as the most expensive city, with three other Asian cities making it to the top five. Meanwhile, EMEA has four cities in the top ten, namely London, Monaco, Dubai, and Johannesburg.
Asia is the most expensive region to buy a car, which is the single most expensive item in the basket. In Shanghai, four items ranked at the very top and the highest weighted-average price increase (30 per cent). Taipei (3rd) moved up the ranking, mostly due to the prices of shoes, bicycles, and wine. Although Asia remains the most expensive region overall, Tokyo (8th) is also the city which slid the furthest (previously 2nd), driven by 13 items ranking lower than in the previous year and an average depreciation of -8.8 per cent on the Japanese yen. Johannesburg lost its relative rank as the most affordable place to live well in the 2022 index, despite five items showing lower prices than last year.
The report suggests that the Middle East has far greater potential for change for cities featured in the index and it could be anticipated that Dubai could be joined by Doha or cities of Saudi Arabia in the future. Furthermore, the study, which assesses HNWI spending intentions for the coming year highlighted that Middle East respondents intend to spend almost equally on health and fine dining as well as leisure accommodation.
Omar Barghout, head of investment advisory, Julius Baer (Middle East) Ltd. said:
“One of the biggest trends we are seeing with regards to investors in the UAE is an increased spotlight on succession planning. This has been exacerbated not only by the pandemic but also of clients being more conscious of the impending wealth transfer process. We also see the rise of a more conscious investor with the next generation of clients focussing more on understanding what they have in their portfolio or what they invest in.”
In line with the trends observed last year, there was an increased focus on where HNWIs are located – stability, security, and cost of living have all become decisive factors. Additionally, HNWIs have a stronger desire to do more with their own wealth and go beyond purchases to have a positive impact on society. Sustainability, ESG and philanthropy considerations also continue to gain significance.
Top 20 cities worldwide to live for the ultra wealthy in 2022
- Hong Kong
- New York
- Sao Paulo
News Source: Gulf Business