Filthy rich come out clean on the other side

Not too long ago, we were battening down the hatches, assuming the brace position and securing our wallets, ready for the worst that the grim predictions of a bleak recession ahead could chuck at us.

There was talk of financial meltdown, credit-crunch misery and hard times. The time had come to trade Waitrose for Lidl, fresh sea bass for Birds Eye fish fingers and start buying our clothes from George at Asda and the local charity shop.

It was grim and it was depressing.

So where on earth did it all go wrong?

For along at the Lamborghini showroom at Fort Kinnaird, business is roaring, along with all the gusto and rasping verve of a Gallardo V10 engine, propelling yet another big-spending, high-flying executive on to his or her next multi-million pound deal.

Strange as it seems at the tail end of a recession, when the nation's finances are on its knees and spending cuts loom, sales of the sporty classic cars with their 70,000 plus price tags are positively booming.

There, cars are being snapped up before they can even be advertised, with sales reps struggling to find enough stock to meet potential buyers' demands and 2009 declared the dealership's best year.

But it's not just high-end car sales reps who are enjoying an unexpected upswing in demand for luxury. Some of Edinburgh's most prestigious hotels are experiencing boom times of almost full occupancy, top-notch Michelin-star restaurants aren't just making ends meet, they're merrily expanding, and, as a new report has just revealed, there are more 1 million plus homes in Edinburgh than ever before.

According to Santander, Edinburgh now boasts 1665 houses with a six-figure price tag - that's a staggering jump of more than a hundred fold in the past decade and evidence of a growing breed of "property millionaires".

So does all this high spending luxury shopping spree mean that Edinburgh has whipped the recession into touch and emerged better off than ever?

Or is it simply the elite few with pounds to spare who can flash the cash?

Savills' real estate agent Jamie Macnab agrees there is a tier of ultra-wealthy clients for whom the recession has been little more than a blip on their bank statement.

"The reality is that it's not difficult for them to get a mortgage or raise the finance," he says.

Another area of luxury expenditure that doesn't appear to have suffered too much from the recession is high-end travel.

According to independent Leith-based travel agent Mark Jones, of Frutin Travel, concerns over currency exchange rates and job prospects hasn't stop people still booking lavish breaks.

"I booked a 7000 holiday for a family of five to go to Mexico just yesterday," he says.

"It's more the bucket-and-spade stuff that's stopped rather than the high-end sales."

Back at home, hotels don't come much posher than The Balmoral - the first place that might be expected to suffer when times are hard. However, general manager Ivan Artolli insists the five-star luxury hotel has actually seen demand grow.

"Occupancy levels were at a record high for the last financial year and our current summer trading is exceptionally strong. Our Michelin-star restaurant has also experienced a record year in sales and the hotel's bars are seeing a great increase in sales of champagne, fine wines and cocktails."

As for jewellery, you can't miss the adverts urging us to cash in our gold. But others are splashing out on expensive new trinkets.

Emma Strachan, of Laing the Jeweller, says: "We've seen a significant increase in watch and diamond sales.

"People are still treating themselves, especially to luxury, specialist watches. Impulse buys are increasing too."

Eating out isn't quite the no-go area that it might have seemed either. Michelin-starred chef Tom Kitchin's Leith restaurant The Kitchin - where a starter alone can cost almost 20 - is about to open his second Edinburgh eaterie in Castle Terrace.

According to Graeme Bell, of Edinburgh Chamber of Commerce, there is no shortage of wealth in Edinburgh - and the luxury spending splurge can even have a positive impact on the rest of us.

"Edinburgh does have a very large concentration of really quite well-off people.

"Their attitude is 'life is short, enjoy it'. The economy is a trickle down thing. If someone better off goes and spends money it filters down to the rest of us."

As for the recession, it may not have been as bad as many feared.

"The scale of the decline has actually been very well buffered for the majority of individuals," he says. "Most have been getting on okay.".