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Luxury living getting tougher
By Joyce Pan |
August 24, 2009, Monday
|
Online Edition
Online Edition
THE cost of luxury living grew at a slower pace than last year but it still outstripped price increases for average consumer goods, an industry report shows.
China's luxury living index, which tracks the prices of 59 luxury consumer goods and services, including property, cars, jewelry and watches, increased 4.6 percent for the year ending June 1.
The increase has slowed sharply from the 12.6 percent of last year, but it is still 6.3 percentage points higher than the increase in the consumer price index, a broad measure of price level of average consumers.
Over the past three years the luxury living index has grown 1.2 times faster than the CPI on average, according to Hurun Research Institute.
"Despite the slower pace, the price of luxury products rose steadily as a result of inflation. Because rich people's income rises faster than for average people, the inflation for rich people is much higher," said Rupert Hoogewerf, chairman and chief researcher of Hurun Report magazine, which is known for its "China Rich List".
Price hikes for cigars, liquor and MBA education contributed most to the rising luxury living cost.
The Hurun Research Institute released China's New Aristocrat Consumption Threshold Report, which showed the spending required to join the so-called upper class.
The entry mark for the Shanghai upper class increased to 83.97 million yuan (US$12.35 million) this year, compared with US$12.1 million in 2008 and US$5.5 million in 2007.
"The capital required to join the Chinese upper class is increasing every year, due to the price increases on luxury goods and their limited supply," says Hoogewerf, "Luxury property has been the key driver for the improvement in lifestyle of China's elite."
Half of the total expenditure goes on housing - typically a suburban villa as well as a luxury downtown apartment - both richly furnished with fine porcelain, jade and artworks.
The report was based on interviews of individuals worth more than US$10 million. About 51,000 individuals - or one person in every 25,000 - has more than 100 million yuan, the report said.
China's luxury living index, which tracks the prices of 59 luxury consumer goods and services, including property, cars, jewelry and watches, increased 4.6 percent for the year ending June 1.
The increase has slowed sharply from the 12.6 percent of last year, but it is still 6.3 percentage points higher than the increase in the consumer price index, a broad measure of price level of average consumers.
Over the past three years the luxury living index has grown 1.2 times faster than the CPI on average, according to Hurun Research Institute.
"Despite the slower pace, the price of luxury products rose steadily as a result of inflation. Because rich people's income rises faster than for average people, the inflation for rich people is much higher," said Rupert Hoogewerf, chairman and chief researcher of Hurun Report magazine, which is known for its "China Rich List".
Price hikes for cigars, liquor and MBA education contributed most to the rising luxury living cost.
The Hurun Research Institute released China's New Aristocrat Consumption Threshold Report, which showed the spending required to join the so-called upper class.
The entry mark for the Shanghai upper class increased to 83.97 million yuan (US$12.35 million) this year, compared with US$12.1 million in 2008 and US$5.5 million in 2007.
"The capital required to join the Chinese upper class is increasing every year, due to the price increases on luxury goods and their limited supply," says Hoogewerf, "Luxury property has been the key driver for the improvement in lifestyle of China's elite."
Half of the total expenditure goes on housing - typically a suburban villa as well as a luxury downtown apartment - both richly furnished with fine porcelain, jade and artworks.
The report was based on interviews of individuals worth more than US$10 million. About 51,000 individuals - or one person in every 25,000 - has more than 100 million yuan, the report said.
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