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ZURICH (Reuters) - Switzerland's super-rich spent more on their lifestyles in the year to August, even though imported luxury goods were made cheaper by the strong franc, wealth management and advisory company Stonehage said on Tuesday.
The 1.2 percent increase in Stonehage's Affluent Luxury Living Index (SALLI) for Switzerland beat the 0.2 percent rise in the Consumer Price Index in the same period and bucked a 6.2 percent drop registered in the SALLI in the previous two years.
"The cost of luxury living increased despite the continuing strength of the Swiss Franc against leading currencies, which cut the price of many high-end goods for consumers," Stonehage said in a news release.
"The currency-linked price reductions of imported goods were counteracted by steep rises in living costs in Switzerland, particularly in terms of the rental market."
The Stonehage report looked at Switzerland's ultra-wealthy, families with disposable assets of more than $10 million. A recent report from Boston Consulting found 9.9 percent of Swiss households had over $1 million in disposable assets, the highest proportion in Europe and second in the world behind Singapore.
The SALLI is based on a basket of some 50 goods and services and includes items such as school tuition fees, property rental in Zurich and Geneva, ski holidays, fine wine and cigars.
If currencies had stayed flat, SALLI would have shown luxury goods and services inflation at 5.3 percent, Stonehage said.
In the period, the franc rose 10 percent against the euro and 21 percent against the dollar, pushing down the cost of imported luxury items such as cars and cigars.
Travel costs fell 5.6 percent, while spending on luxury consumables fell 4.7 percent as prices for luxury holidays and imported cigars and champagne plunged in Swiss franc terms.
But those falls were canceled out by rises in rental costs in Zurich and Geneva of 12 percent and 4 percent, respectively.
"It's true there is a shortage of top quality accommodation in Switzerland, but we didn't anticipate price rises would be on that scale," said Mark McMullen, Executive Director of Stonehage's Geneva branch.
Also buoying spending was an 8 percent jump in art prices, which helped push spending on "investments of passion" like luxury cars and jewelry to a 1.1 percent year-on-year rise.
Sales at luxury goods groups such as Richemont and LVMH have held up well this year as newly wealthy families in emerging markets have stepped in as buyers, taking up the slack from recession-hit developed markets.
However, shares in these groups began to flag in the third quarter as concerns grew about the sustainability of growth in China, the world's fastest-growing luxury goods market.
Reporting by Martin de Sa'Pinto; Editing by Will Waterman