City's wealthy living larger than life
- Source: Global Times
- [09:53 June 13 2010]
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By Tang Zhao
Driven by soaring property prices, rich Shanghainese were individually worth 106 million yuan ($15.5 million), a 22-percent rise from last year.
The housing of these upper-class elites amount to an average of 29.8 million yuan ($4.36 million) per family, typically including a luxury villa and a downtown apartment, said Hurun Report, a study on luxury living released Saturday.
Accounting for 14 percent of China's wealthiest elite, over 7,000 rich Shanghainese are more flush than ever with some 100 million yuan ($14.6 million) in cash and assets.
While super-sized Chinese wallets continued to expand over the last year, the coun-try's rich were forced to spend roughly 11 percent more on luxury goods this year due to rising prices of high-living goods, up from a low of less than 5 percent last year, according to Hurun Report, the fourth annual study of its kind, which monitored 58 luxury products, including properties, automobiles and jewelry.
The figure is nearly three times greater than the some 3 percent number released by the Consumption Price Index of the National Bureau of Statistics in May.
"It is getting more expensive to buy one's way into China's elite inner circle," said Hurun Report founder and chief researcher Rupert Hoogewerf, also known as Hurun in Chinese. "Demand, driven by more wealth creators looking for ever more sophisticated luxury products, is far outstripping supply. The price of a luxury property in Shanghai has almost tripled in the past four years."
A growing number of these members are of the "New Aristocracy," who are on average 15 years younger than overseas foreigners, and are increasingly seeking "passionate investments" overseas to boost financial returns and to improve living standards, said Hoogewerf.
The nouveau riche spent more money on executive management courses though at a slightly slower pace this year at some 5 percent compared to over 9 percent in 2009.
More Chinese students are also expected to study abroad as the strength of the yuan lowers the cost of learning overseas.
For travel leisure, one individual shelled out 7 million yuan ($1 million) for a holiday home in Sanya, as vacation home prices in the popular domestic travel spot in southern Hainan Province rose.
At the same time, automobiles and yachts increased in price by an average of 1.5 percent compared to 3.2 percent last year, led by a 12 percent hike in the price of a Rolls- Royce Phantom to 9.2 million yuan ($1.35 million). But the drop in the pound and the Euro compared to the yuan meant that a Sunseeker Manhattan 70 yacht saw its relative price fall by 10 percent.
Socialites, of course, made sure to enjoy the high life, too.
"Luxury drinks rose at a similar rate to last year, 9.1 percent as opposed to 10 percent in 2009," said the report. "Fine Bordeaux reds and top-end Chinese baijiu led the way with price hikes of 30 percent."
Château Lafite Rothschild and Moutai 30 Years rose over 36 percent and over 29 percent, respectively. Other imported luxury drink brands reacted to strong demand with prestige pricing strategies.
A bottle of Louis XIII costs 17,580 yuan ($2,573), up some 17 percent year-on-year, and an average of 10 percent every year since 2006, when a bottle was priced at 9,800 yuan ($1,434).
The report said demand for luxury items will remain strong as China now has 875,000 individuals with a personal wealth of 10 million yuan ($1.46 million) or more, up some 6 percent over the past year, while 55,000 individuals hold at least 100 million yuan, up almost 8 percent over the same period.
