Dubai has risen in the Julius Baer Lifestyle Index 2021, which tracks global prices and consumer behaviour in relation to the high-net-worth-individual (HNWI) lifestyle.

In the Global Wealth and Lifestyle Report 2021, released on Sunday, Dubai took the 12th spot, up from 17th last year, as a substantial influx of HNWIs bolstered the luxury goods market, which was valued at just over $1 billion in 2020.

The report credits this rise in ranking to “ambitious plans for economic diversification coupled with zero corporation tax and VAT at just 5 percent, recent regulations and others underway pertaining to foreign ownership rules for onshore companies in certain sectors, as well as 10-year visas for investors, professionals, and retirees”.

The report is based on the prices of a basket of consumer goods and services that reflect the HNWI lifestyle in 25 key cities around the world. In this second edition, the report also captures developments in the “conscious consumption movement”, as COVID-19 has raised consumer commitment to, and awareness of, buying ethically and sustainably. With this, investors can estimate the portfolio returns needed to preserve, or even grow, their purchasing power.

Video: Flying high: Dubai improves ranking on global lifestyle index

Despite the impact of the pandemic, the report said there is little doubt that the UAE will bounce back as it prepares to celebrate its 50th anniversary, owing to its growing emphasis on technological advancements and research and development.

Omar Barghout, Head of Investment Advisory, Middle East, at Julius Baer said, “Dubai has been a pioneer in the efforts to combat COVID-19. With the aid of a fiscal stimulus, it has managed to bolster finances amid the weak economic backdrop and low oil prices. The reopening of commercial activities has attracted tourists and investors back to Dubai, raising hopes that the much-anticipated Expo 2020 (rescheduled to 2021 due to the pandemic) will be a success. In addition, the Emirate is emerging as a vibrant hub for tech start-ups, drawing significant early-stage investments in the fintech space.”

Globally, the report found that this year’s changes to the HNWI basket have largely benefited those living in Asia-Pacific countries, where the new items tend to be cheaper. Despite this, Asia remains the most expensive region partly because of the region’s swift recovery from the global health crisis, currency stability, and price resilience for the index items.

The Americas are the most affordable region to live a luxury lifestyle this year, “mostly due to the price of the US and Canadian dollars falling against other major global currencies, and a sharp devaluation of currencies in Latin America.”

(Writing by Brinda Darasha; editing by Seban Scaria)

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© ZAWYA 2021