High wealth isn’t a shield from inflation, so what’s driving up costs for HNW lifestyles?
Sydney posted the sharpest climb of any city this year, rising six spots to eighth, driven by a strong Australian dollar and elevated import costs for luxury goods. Even so, regional prices rose by 7.4% in dollar terms, below the global figure.
Europe posted the steepest regional increase, with prices up 14.1% in dollar terms on the back of euro and Swiss franc strength. Zurich, Monaco, Paris, Milan and Frankfurt all rose in the rankings, while Barcelona held steady.
The Middle East findings carry a caveat: data collection wrapped up before the outbreak of conflict involving Iran, so the report’s snapshot doesn’t reflect the current situation in the region. Dubai fell to 14th place, a shift the bank linked more to other cities becoming pricier than to any softening in Dubai itself, given the dirham’s peg to the US dollar.
Beyond currency, raw material costs also pushed prices higher. Gold has more than doubled in price since 2024, feeding through into jewellery, which rose 16.4%, and watches, up 15.5%. Luxury goods overall climbed 12.3% on average, a trend Julius Baer linked to higher input costs, skilled labor expenses and pricing strategies from major European luxury houses that anchor prices to the euro or Swiss franc.
Christian Gattiker, head of research at Julius Baer, said: “Currency, once again, is at the forefront – but it is the interaction between currencies, assets, and behaviour that defines the real story.”
