por the daring rich who want to acquire a second home in Dubai, it is time to make a decision. In one year, the prices for a beautiful home on the water have increased by almost 100%. People from all over the world flock to this patch of desert on the edge of the Persian Gulf. The crisis announced to us by the International Monetary Fund, against a backdrop of runaway inflation and war in Europe, does not appear to have disrupted the prosperity of the wealthiest. According to the bank Credit Suisse, the number of dollar millionaires in the world is expected to grow from 62 million in 2021 to 87 million in the next five years. And the ultra-wealthy, those with assets of more than $30 million (30.9 million euros), would be nearly 385,000 at the same time.
The good health of this wealthy planet is evident in the spectacular enthusiasm for the Porsche IPO on September 29 – whose stock market value now exceeds that of its parent company, the giant Volkswagen – but also in the results of LVMH, the world leader in luxury. In the last three months alone, from July to September 2022, sales have increased by almost 20%, and even by 22% for its flagship brands, Louis Vuitton and Dior. Even more alarmingly, in the European continent, which has been most affected by the energy crisis and inflation, it is performing best, with sales up 43% since the start of the year. Until something bad is good, the collapse of the euro against the dollar caused an influx of American tourists into its Paris stores, while the Chinese engine stalled due to Covid, rising just 2%.
“Not Immune”
Three dangers still hang over this community. First, the health of the stock market. Major global markets have fallen between 20% and 30% this year, and the decline could accelerate further given the likely turnaround in corporate earnings in the coming months as developed countries slide into recession. But the rich have their savings largely in the stock market and of course in real estate. In the latter case, the rise in rates is causing a serious crisis that should manifest itself in 2023. Finally, China is struggling to get out of its real estate and Covid problems. “The luxury industry is not immune to recession or economic shocks”, acknowledged Jean-Jacques Guiony, the financial director of LVMH. Before adding that crises are moments of selection of the best. For the others, it should not be forgotten that the palaces of Dubai are built on sand.