Maintaining a lifestyle with high purchasing power in the most important urban centers of the planet has become more expensive in the last year, people with more resources among the general population also had to adjust to the new conditions after the pandemic.
Persistently high rates of inflation, and the fact that raw materials, energy, fuel, and hiring of personnel have become more expensive, impact the lifestyles of those with more resources.
The 2023 global wealth and lifestyle report published by the Swiss bank Julius Baer reveals the increase in the cost of living in general, to which no one escapes.
Impact on lifestyle after the “new normal”
According to the report, the prices of all goods and services in the Julius Baer Lifestyle Index rose an average of 13 percent in local currency and 6 percent in dollars in the last 12 months.
Asia is the most expensive region to live well in the world, for the fourth consecutive year. Also, the “Lifestyle Survey” shows that HNWIs are taking steps to preserve their health and wealth at an increasing level.
Another noteworthy fact is the location of the priorities, in this sense physical activity and wellness practices, health insurance, education as well as family and financial resilience are top priorities to help prepare for future adversities.
In other words, wealth is no longer considered as a figure located in a bank account, but rather as a series of factors that together have the potential to preserve and boost wealth.
The Julius Baer Lifestyle Index analyzes the cost of a basket of goods and services representative of what it means to “live well” in 25 cities around the world.
The result is an overview of the relative cost of maintaining a high net worth lifestyle in various major urban centers around the world.
The case of CDMX
In the case of the Mexican capital, it rose one place in the ranking, ranking 21st, located between Manila and Frankfurt. The local prices of the previously defined basket in the city have increased on average 13.5 percent in the last 12 monthsbut it has not experienced the more dramatic changes that other cities have registered, with the exception of hotel accommodation, which rebounded 97 percent year-on-year.
Mexico ranks as one of the most visited countries in the world, tourism is a significant part of its GDP, and the industry has performed better than most during the pandemic due to the fact that the borders were kept open. The demand seems to continue to increase, with an estimated visitation in 2023 of 40 million tourists.
However, travel has also become more expensive in the last year: flight costs increased 25 percent and haute cuisine rose 19 percent. These increases coincide with the results of the Lifestyle Survey, which show that Latin American respondents have consistently spent more on travel, hospitality and fine dining in the last 12 months, and intend to continue doing so in the coming year. .
However, Mexico City is not overly expensive compared to other cities where more than half of goods and services are less expensive than the global average, especially prime real estate, private education, and health insurance. These three key lifestyle elements are combined with high levels of livability, although the cost of security is something that could impact.
Asia, the most expensive area in the world
The Asian continent is the center of wealth and lifestyle par excellence, as well as the essential engine of the global economy, and the most expensive to live on.
Overall, six cities in Asia moved up the rankings and four fell down; seven cities in Europe, the Middle East and Africa fell in the ranking and only one rose (Dubai); and in America four cities rose and one fell.
This was the largest movement recorded in the last three years, but it has left us with one of the most balanced rankings of the best cities globally in the history of the report. It is not only about the resurgence of America, but also that Europe and America are fighting for second place, while Asia, which has the top three places, continues to lead.
For the first time, Singapore is the highest city in the Lifestyle Index ranking, followed by Shanghai, last year’s leading city, and Hong Kong in second and third place respectively. Taipei is the only other Asian city in the top ten, at number 8.
In the Americas, New York rises from 11th to fifth place and Miami climbs 8 places to 10th place, while Brazilian metropolis São Paulo enters the top ten for the first time at number 9. Santiago de Chile, which was added to the Index just this year, joins in place 23.
The biggest price increases are in high-end, high-demand consumer products such as wine and whiskey, as well as luxury cars and catering services. Hotel suites, business class flights and fine dining have increased significantly in price as demand for travel and entertainment increases.
In general, the price variations of both goods and services in the Index show the impact of the increase in the costs of energy, raw materials and personnel hiring. This, combined with inflation, currency changes and ongoing supply chain disruptions means that every industry, business and consumer is feeling the pinch in their purchasing power, even those with high incomes and strong net worth.
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