Becoming part of China’s elite is becoming harder, as the prices for luxury goods are rising fast, tells Rupert Hoogewerf, composer of the Hurun rich list, the Shanghai Daily. Especially property prices pushed the luxury index CPI sky high.
The luxury CPI grew 11.3 percent in the year ending June 1, compared with a growth of 4.6 percent last year amid the fallout from the global financial crisis.
The figure was more than 8 percentage points higher than the general CPI, which rose 3.1 year on year in May, according to the Hurun Luxury Living Index Report for 2010 released over the weekend.
“It is getting more expensive to buy one’s way into China’s elite inner circle,” said Rupert Hoogewerf, founder and chief researcher of the Hurun Report.
“Demand, driven by more wealth creators looking for ever-more sophisticated luxury products, is far outstripping supply.”
The Hurun Luxury Living Index tracks retail price changes of a basket of 58 luxury products and services including education, liquor, jewelry, cars, and high-end homes.
Luxury property in Shanghai has tripled over the past four year, Hoogewerf discovered.
Luxury property prices rocketed 45.1 percent year on year in June, much higher than any other category.
The climb followed a fall of 1.8 percent last year and rises of 29.8 percent and 13.9 percent from 2008 and 2007, the report said.
“The limited supply of luxury property in the face of strong demand, in the context of a generally buoyant housing market, was a significant factor in large increases such as these,” the report said.
The Hurun Report, best known for compiling the China Rich List, at the same time released a study, “New Aristocracy Threshold,” which gave a guideline on just how much cash is needed for a family unit to have a super-luxury lifestyle in China.
The annual spending threshold for the rich rose to 106 million yuan (US$15.51 million) this year, up 22 percent from a year earlier.