South Africa is one of the cheapest places in the world for someone to live a life of luxury, a new report from Swiss financial group Julius Baer has found.
The Zurich based private bank’s inaugural Global Wealth and Lifestyle Report for 2020 assesses the prices and consumer behaviour in 28 major cities globally, to better understand the world of luxury living.
The indices contained within the report are based on a wide-reaching survey, the basis of which is a comparison of the prices of various goods and services – from hybrid cars to laser eye surgery – broken down globally, regionally and by item-type.
“‘Luxury’ once stood for fancy goods, such as handbags or sports cars. Now it has morphed into a broad category that includes services and experiences, from fine dining to new lifestyle trends such as wellness,” the group said.
“Behind these developments is an increase in the wealthy demographic, who are international in their outlook and desire a similar standard of living wherever they are.”
The most expensive cities for luxury living
In the overall index, Hong Kong emerged as the most expensive city among those measured to live a luxury lifestyle, while Mumbai, India, ranked as the least expensive.
Johannesburg, for South Africa, was ranked as the second most affordable city for those wealthy enough to do it.
Although New York is notably expensive for services and consumables, on a price-weighted basis it ranks 4th, given its relatively inexpensive high-ticket items such as cars.
Meanwhile, European cities tend to offer reasonable value, Julius Baer said.
Europe’s best-value cities for luxury are Barcelona in 24th place and Frankfurt in 26th, whereas London (in 7th place) is the most expensive city in Europe, the Middle East and Africa.
The best value for luxury living differs, depending on what you’re looking for.
The luxury housing market, a combination of low interest rates and a flight to quality has caused real-estate prices to surge in the global gateway cities of London, New York and Hong Kong. Subsequently, demand has spread to many other secondary locations.
For connoisseurs of fine dining and exquisite wine, Paris remains one of the most expensive cities. But Jakarta and Hong Kong offer the best value for a bottle of vin rouge.
Johannesburg, South Africa’s economic hub, offers the best-value prime property of any city in the index.
“This is largely due to the depressed economy and rising unemployment conditions,” Julius Baer said.
Johannesburg is recognised internationally as the most industrialised and financially sophisticated city in the African continent. Potential catalysts for the real estate market include less stringent bank lending conditions and investment demand spurred by the African Continental Free Trade Area Agreement (AfCFTA).
“While property prices have risen modestly, the weak rand means that in USD terms prices have fallen. The rand is highly sensitive to domestic political events and further depreciation in 2020 would influence the cost of luxury living in the city,” the group said.
Other large domestic purchases, such as cars and pianos, are also competitive, while fine dining and wellness services are all far below the global average prices. It is also a cost-effective choice to hold a destination wedding.
By contrast, portable shopping items are typically priced above the global average, with the exception of well-priced watches and well priced ladies’ shoes.