Dubai has been ranked 14th most expensive city in the world for high net worth individuals (HNWIs) this year, slipping two places from the previous year, according to Julius Baer’s Global Wealth and Lifestyle Report 2022.
The study tracks prices and consumer behaviour around the world to gauge the price inflation of a basket of goods and services in cities around the world.
The Covid-19 pandemic, the rise in inflation and the Russia-Ukraine war have been blamed for the increase in the cost of living.
Mark Matthews, Head of Research Asia Pacific, Bank Julius Baer, stated while the world is dealing with the aftermath of a global pandemic, factors such as increasing geopolitical tensions and rising inflation have impacted the spending patterns of investors and made them more conscious about securing their financial future.
Shanghai tops in terms of the costliest city for HNWIs followed by London, Taipei, Hong Kong, Singapore, Monaco, Zurich, Tokyo, Sydney and Paris.
Dubai: the region’s global city
The Swiss bank said Dubai’s non-oil private sector economy showed a marked growth in the emirate’s travel and tourism sector, despite rising inflationary pressures.
It added that the versatility and diversity of the UAE lure tourists to the country from across the globe. The report suggested that the Middle East has far greater potential for change and it could be anticipated that Dubai could be joined by Doha or cities of Saudi Arabia in the future.
When it comes to hotel rooms, Europe, the Middle East and Africa (EMEA) region saw overall price increases of almost 50 per cent, due to astonishing price increases in Dubai of 195 per cent year-on-year, the second strongest increase after London, driven by a surge in visitor numbers.
Despite differing pandemic restrictions, Dubai continued to receive tourists during 2021 – driven by a combination of pent-up demand as travel reopened, the effect of Expo 2020 Dubai. This and increased staffing costs have driven price rises in accommodation.
The city also witnessed 44 per cent growth in residential property prices with short-term rentals and holiday homes on an upswing.
Within the EMEA region, Dubai is the most expensive city to buy a car (20 per cent higher than the regional average) but also a men’s suit and a watch.
“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 by 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,” said Omar Barghout, head of investment advisory, Julius Baer (Middle East) Ltd.
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