Growing demand from rich international buyers, particularly among billionaires, is helping to create a new global super class of property in some of the world’s most important cities, according to fresh research.
These high-end global destinations continue to defy the wider economic downturn, with property prices in the top ten cities having increased by 10% in the first six months of 2011 compared to the corresponding period last year, the latest Savills Research global billionaire property index shows.
Hong Kong is the most expensive place to buy a home globally in value terms with average property prices standing at £6,700 (Cdn $10,800) per square foot, up 83% from December 2005 to December 2010 and an additional 10% on top of that to the end of June 2011.
In second place is Tokyo at £5,190 ($8,400) per sq.ft., followed by Paris at £3,270 ($5,300) per sq.ft. and London at £3,090 ($5,000) per sq.ft..
There has been significant capital growth in emerging markets. Russia (Moscow), ranked fourth, has witnessed values increase 110% from December 2005 to 2010 and a further 2% increase this year to take it to £2,520 ($4,000). Singapore has seen a 144% and 16% rise, while Mumbai has appreciated 138% and 7%.
The 10% average prime property price growth recorded in the top cities worldwide compares to average price growth of 6% for ordinary properties in the same cities,
Yolande Barnes, director of residential research at Savills, commented: “We recently identified ten world class cities whose real estate markets have more in common with each other than the mainstream markets of the counties in which they operate and they are all attracting billionaire’s dollars, whether generated at home or overseas.
“Global billionaires can make any country their home, and often have several different residences across the globe. Most will seek a base where they are doing business. This has the effect of funnelling global equity into the very best residential real estate, a rare commodity in any city. Billionaire buyers demand the best international standards of accommodation and are paying prices to match, creating a super class of global billionaire homes,” she added.
The Top 10 ‘World Class’ cities are as follows: Hong Kong, London, Moscow, Mumbai, New York, Paris, Singapore, Shanghai, Sydney and Tokyo.
Source: International Estate Agent Today