From caviar and champagne to high end cars, luxury living in Switzerland has become increasingly expensive, according to the Stonehage Group, a European multi-family office for ultra high net worth families and entrepreneurs.

From caviar and champagne to high end cars, luxury living in
Switzerland has become increasingly expensive, according to the Stonehage Group,
a European multi-family office for ultra high net worth families and
entrepreneurs.

The sixth Swiss Stonehage Affluent Luxury Living Index
(SALLI) – which measures price inflation on a range of luxury items from caviar
to cars – increased by 1.1 per cent in the past 12 months, compared to 0.8 per
cent in 2012 and 1.2 per cent in 2011. This compares to an average inflation
rate of -0.1 per cent, measured by the Swiss Consumer Price Index (CPI) over
the same period, the firm said.

Stonehage said that the cost of TGV tickets between Geneva
and Paris, apartment rental in Zurich and caviar all fell by approximately 9
per cent over the past year. However, the index revealed increases in the price
of luxury shopping items such as watches and handbags, high end cars and
champagne, which contributed to pushing up the overall cost of living for the
ultra-wealthy.

“This year’s findings show that it is still more expensive
to be wealthy in Switzerland, partly due to a 2.4 per cent fall in the value of
the Swiss Franc against the Euro, and we may see consumers looking abroad in
the coming year to get the best deals on luxury items,” said Mark McMullen,
executive director and head of Stonehage’s international family office
division, based in Geneva.

The “consumables” category of the index increased by 8 per
cent, driven by large increases in the cost of champagne (24.2 per cent) and
restaurant dining (average 24 per cent).

Meanwhile, in the “travel” category, a fall in TGV travel
was offset by increases in the cost of hotel stays in Paris and New York, as
global hotel prices continue their slow rise towards pre-financial crisis
levels. The price of a week in Verbier also increased due to increased demand
from wealthy holiday makers, particularly from emerging markets, for whom
Switzerland has become an increasingly popular holiday destination.

The “investments of passion” category increased by 2.2 per
cent, as luxury items such as designer handbags, watches and clothes all went
up in price, fuelled predominantly by a hike in demand for luxury brands in
China and the Middle-East.

A 0.6 per cent decrease in the “housing and family” category
was caused by a fall in the cost of rental property in Zurich, which, the firm
said, was caused by a surge in property development in previous years, meaning
that supply exceeded demand.

The “culture and entertainment” category increased by 3.1
per cent. The firm said that this was primarily due to an increase in the cost
of leisure activities such as skiing, water sports and fitness memberships.

The Stonehage Affluent Luxury Living Index (SALLI)
Switzerland, is a proxy for price inflation experienced by Swiss-based UHNW
families. It measures a basket of luxury goods and services regularly purchased
by UHNW clients. The basket consists of approximately 50 goods and services on
a “per use” weighted average basis. This includes items such as annual tuition
and boarding fees for two children, Zurich and Geneva rental costs for a family
property, a family ski holiday to St Moritz, fine wine and cigars.