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Thursday, June 30, 2022

Mexico City is lower on the list of the world’s most expensive cities

Study: Quick response to pandemic buoyed Asia, while less successful efforts in Mexico have lowered property values in its capital

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Mexico City has lost two steps on the Global Wealth Index. Photo: El Universal

The turmoil of the past year has made Mexico City cheaper. Mexico’s capital went from 21 to 23 in the latest Global Wealth and Lifestyle ranking, reflecting lower real estate prices.

Mexico’s response to the coronavirus pandemic dented property values in Mexico while rising them in Asia, said an official from Julias Baer Group, which compiled the list.

Asia Pacific was found to be the most expensive place to live in, with Shanghai overtaking Hong Kong as the priciest city. The region’s success credited to its swift recovery from the coronavirus pandemic. By contrast, the Americas were the most affordable because of the region’s currency slumps.

Real estate costs in Mexico City are down by one-fifth, on average, said a Julias Baer official.

Restrictions on foreign real estate investors were also cited by the official.

Meanwhile, a significant part of Mexico City’s affluent population fled to the beach, countryside, or abroad to ride out the pandemic, he said.

The study places North America as the world’s most affordable region for a luxury lifestyle mainly because the U.S. and Canadian dollar is falling against other major world currencies and Latin American currencies have been devalued.

Mexico City and Vancouver are among the cheapest cities in the index. Only one city in North America, New York, remains among the 10 most expensive. This region has the highest healthcare costs, but personal-use technology remains inexpensive and many of the tech titans are based in the United States, the study reports.

By contrast, the Americas are the most affordable region to live a luxury lifestyle this year, mostly attributed to the price of the US and Canadian dollars falling against other major global currencies, and a sharp devaluation of currencies in Latin America.

Other cities

Johannesburg — the only African city on the index — emerged as the most well-priced place for luxury.

All of the other cities in Europe, the Middle East and Africa have risen up the rankings, buoyed by the strength of the euro and the Swiss franc, except London, still struggling under Brexit uncertainty. Those cities were also appreciably more expensive than the Americas, which cheapened considerably due to currency fluctuations.

London is one of the cheapest places to buy fine whisky, due to its geographic proximity to Scotland and Ireland, but it is also the third most-expensive place to buy residential property.

The luxury categories that have dropped the most in price are womens shoes (-11.7%) and hotel suites (-9.3%). The biggest gains are in business class flights (+11.4%) and whisky (+9.9%).

“As in previous years, the data of Julius Baer’s Lifestyle Index 2021 points to two clear conclusions for those looking to preserve their wealth,” said Nicolas de Skowronski, a member of the Julius Baer executive board. “The first is to invest; inflation and other factors such as exchange rates and local regulations can play a huge role in the purchasing power of your wealth. Knowing your local or even personal inflation rates and secondly adopting the right wealth management and planning strategies are essential to preventing a real-term erosion of wealth over time.”

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