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NYC is Now Cheaper… For the Ultra-rich, That Is

One annual survey lists The Big Apple.

For 33 years, the Cost of Living Extremely Well Index (CLEWI has been used by Forbes Magazine to measure the Consumer Price Index (CPI) of the people who don’t go to Walmart, who refuse to eat at fast food chains and who abhor the experience of riding in subways. In other words, the ultra-rich. But this year, the report has a different observation about the CLEW, “It rose by only 1%—a dramatically slimmer increase than last year’s 12%, and the slowest rise since Forbes began tracking the numbers. This is great news for the super-rich, who, new research shows, have taken to bargain-hunting—a habit they once considered unthinkable… Few have been immune to the global economic slide, and luxury consumers, who fear both appearing insensitive to the plight of others and for their future earnings, have curbed their spending.”

So for this very select group of people, there’s good news although they’ve slightly zipped their wallets for this year. New York has gotten more affordable, ranking third in the list. The city trails London and Dubai after luxury goods registered cheaper prices in these two cities. Now, anybody set for a Dom Perignon at Sherry-Lehman?

But we’re not that impressed with the basket of luxury goods that the publication has chosen even if these have been used for the past years already. Goods such as a coat, silk dress, pair of loafers, shirts, shoes, sheets, silverware, perfume, sauna, yacht, shotguns, thoroughbred, swimming pool, tennis court, cigar, airplane, helicopter, magazine subscription, Duffel bag, purse and yes, a train set are included not to mention services like face lift and psychiatric consultations. But what about properties? Nothing’s been included. And we’re expecting Forbes to modify their list.

In order to keep up with the Joneses, the wealthy need to own properties in the priciest neighborhoods. In fact, there’s more prestige in owning a mansion in Scarsdale than a 1 ounce Joy Patou fragrance. If they factor in property values for a specific location, it can add more relevance to the index. As BusinessWeek’s Prashant Gopal states, “… residents are also paying a premium for the cachet that comes with having a certain Zip Code. They want to live with their peers, go to the same country clubs, and send their children to the same schools.”

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