Asia's luxury goods inflation beats CPI for the rest
of us
September 1, 2011 at
4:32 pm by Larry Levinson
Bank Julius Baer, in what can only be seen as an altruistic
attempt to soften the bad news for their wealthier Asian clients, has gone to
the trouble of calculating how much prices have risen in the East for the
well-heeled to support their Gucci habits.
The Zurich-based private bank, with the help of broker
CLSA, calculates that the price of living the life of a high-net-worth
individual in metropolitan Asia has gone up 11.7% for the 12 months
ending April 2011.
The increase in the bank’s lifestyle index — a basket of 20 luxury
goods and services — “shows clearly that the cost of living in luxury in Asia
substantially outpaces conventional CPI measures,” Julius Baer notes helpfully.
That’s inflation of 5.1% for everyone else, they said.
The main reason for the increase is higher demand. That is, the
wealthy are fighting with all the other nouveau riche for baubles and bangles
and bright shiny beads.
Before you start worrying the HNWIs — their acronym — will have
trouble keeping the Rolls in motor oil, you should know that Julius Baer is
predicting the number of dollar millionaires in Asia will double to 2.82
million by 2015. At the same time, their wealth will triple to $15.8 trillion.
The bank expects China and India to account for 40% of the
world’s growth in gross domestic output through 2012, supporting the need for
China to promote economic expansion. Read “loose money” stance.
“Our report is unique as many of the insights come from
conversations with our clients, enabling a deeper understanding of what is
important in this market,” Boris Collardi, CEO Julius Baer, said in a
prepared statement.
A sample of items from Bank Julius Baer’s lifestyle index
|
Item |
Price (USD) |
Pct. Increase from
2010 |
|
Bottle of Lafite
Rothschild 2000 |
$3,336 |
21.9% |
|
Chanel quilted bag |
$4,185 |
17.5% |
|
Steinway Grand
Piano |
$201,021 |
16.7% |
|
Ladies Classic
Louboutin pumps |
$1,868 |
10.8% |
|
Tiffany 2 ct
diamond ring |
$96,479 |
10.3% |
|
Oyster Rolex watch |
$32,201 |
9.1% |
|
Cohiba siglo VI
cigar |
$760 |
5.0% |
|
Scupltra liquid
facelift |
$6,578 |
4.3% |
More topics: Asia, bank julius baer, China, Chinese stocks, emerging markets, hnwi, Indian stocks, investing in China, investing in India, luxury, rich, wealthy
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