Lamborghini supercars and luxury Rolex watches have sold out across Dubai, even as turmoil grips the global economy with the cost of living increasing and inflation surging.
As inflation rises, higher costs are forcing companies to take drastic decisions such as lay-offs and price increases. Although constant efforts to battle inflation are ongoing globally, the wealthy are taking it as an opportunity for investments and luxury purchases.
Multiple sources in the UAE have said that despite having the money to purchase these luxury items, the demand outweighs supply, one cannot walk into a Rolex store and walk out with a watch of their choice.
The unavailability of items at the retail level contributes to the value and price increase from resellers, who still seem to have an influx of buyers willing to pay a premium for items unavailable in stores.
A Rolex Daytona at the official retail showroom should be available for AED 51,000 but in the pre-owned or resell market the timepiece can cost anywhere from AED 80,000 to AED 600,000 due to it being increasingly impossible to get one from Rolex retail showrooms.
In August, Arabian Business reported that Lamborghinis are sold out until 2024 as demand continues to soar. The luxury supercar company reported the best half-year sales in history with record-breaking profits, pre-selling their entire production line until 2024.
Wealthy customers are indulging in these statement cars, CEO Stephan Winkelmann said, “We have more and more stepping into Lamborghini. Because they trust the brand, they see how beautiful the cars are, how high performing they are.”
“Cars are now selling for 30 percent higher than last year due to the lack of supply from manufacturers but customer demand is still high despite the price hike,” Pratik Rajesh, Wafrah Automotive told Arabian Business.
LVMH, the luxury group housing brands like Louis Vuitton, Dior, Tiffany & Co. have exceeded market forecasts in Q3 2022, experiencing a surge in sales as demand for luxury goods proves continued resilience from inflation. Q3 sales topped $19.2 billion, a 19 percent raise year on year, Reuters reported.
Luxury brands are increasing prices seemingly without affecting demand.
According to Lucile Andreani, Christie’s head of handbags in Europe, Middle East and Africa the spending has trickled down to the luxury goods secondhand market as well, which seem to be attracting new buyers, as reported by Bloomberg.
Just this month, there have been multiple record-breaking luxury property sales in the UAE. Mukesh Ambani purchased a $163 million Palm Jumeirah villa, a Palm Jumeirah mansion sold for $82 million, seaside luxury villas sold out within two months of launch in Ajman.
“Even though the supply for properties has generally gone up in the last year in Dubai, there is still a gap in the market for high-end projects with a lot of demand coming from Eastern Europe and Asia,” Karan Dhakka, Pride & Properties told Arabian Business.
Worldwide inflation has caused fear and panic among consumers with rising concern towards bills, food and basic amenities. Food and non-alcoholic beverage prices in the UK rose by 14.6 percent in the 12 months to September 2022, up from 13.1 percent in August, according to a recent report from the Office for National Statistics, however, even though inflation has impacted many people worldwide, the wealthy seem untouched.
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