It’s a good time to be rich in India. While the rest of us lesser mortals struggle with inflation, the cost of luxury goods for the super rich in Mumbai fell by a whole percentage point through 2015, according to a lifestyle index published by Swiss private bank Julius Baer.
The biggest driver of deflation for the rich has been, surprisingly, in real estate. The cost of a standardised 4,000 sq ft residential property in a prime location has fallen 9 per cent year-on-year here, making Mumbai the most affordable city in Asia for luxury living.
The lifestyle index covers the prices of 20 identical goods and services in 11 of Asia’s largest cities, with Shanghai, Hong Kong, Singapore being the most expensive. The more affordable cities for the rich are Seoul, Kuala Lumpur, Tokyo, Bangkok, Taipei, Jakarta, Manila and Mumbai.
Among the luxury goods and services that the index tracks are the cost of a business class flight, a wedding banquet at a 5-star hotel, a golf club membership, tuition for a year at Eton, a diamond engagement ring from Tiffany’s, a single Botox sitting, a Giorgio Armani suit, a pair of Christian Louboutin shoes, a Mercedes S class car and a bottle of Lafite Rothschild 2000. A high networth individual (HNI) has been defined as a person with net investable wealth of $1 million or more, excluding property that is his main residence.
HNI wealth rise According to Julius Baer’s forecasts, HNI wealth in India will rise to $2.28 trillion in 2020 from $949 billion in 2010.
The report shows foreign-made luxury products are as expensive in India as they are in their home countries, be it a Rolex or a Miss Dior handbag, while locally available services, like a private room at a hospital, are a lot cheaper in India.
The lone exception is a box of Cuban cigars. This, according to Thomas R Meier, Member of the Executive Board, Julius Baer, implies rich Mumbaikars aren’t as interested in them.