It is fascinating to study wealth, its growth and movement. And that’s exactly what luxury property specialist, Knight Frank, and Citi Private Bank in London have done to compile The Wealth Report 2012. The most interesting finding of the report is that Asia and Latin America is generating a major portion of the world’s growth but the rich in those regions are also investing in luxury real estate in Western Cities as they prefer to live there. The report has compiled a list of most preferred cities globally and London heads the list. The jet set crowd loves the city the most and is freely investing for both first and second homes. Chinese cities like Beijing and Shanghai are rising up the list very fast and might find a place in top five. Most of the experts feel that Shanghai is the city of the future and are convinced that by 2050 it will be the global urban centre. The top two Chinese cities have recorded the fastest growth and are followed by London, Singapore, Hong Kong and New York. The rapid economic growth has been the main factor responsible for this phenomenon but it is not the only reason. There are many aspects in a city that attracts the rich from across the world. Number of Fortune 500 companies with offices there is one of them. The lifestyle a city offers is another important aspect along with cultural diversity, relative safety and entertainment avenues.
By 2020 the new cities that are expected to make it to the top ten list are Beijing, Shanghai and São Paulo. The Latin American city is developing as the capital of South American capitalism. The rich all over South America prefer the city the most for second home. Miami is another city that is perceived as the most important city in the world after New York by the South American rich particularly those who have business interest in North America. There are some cities in China that have witnessed very rapid growth and have attracted huge investment for its development. Dalian in north-east China and Chongqing in the south-west are most likely to make an entry in the ranking list sooner than later. The flow of global wealth has played an important role in shaping the leading prime markets. In today’s scenario the Chinese, Russian, Middle Eastern and Latin American are the most active as prime property buyers. The trend is expected to go on over the next decade and might be joined by few other nationalities who come from growth economies.
The Wealth Report has studied in detail the most expensive real estate. Monaco still commands the highest prices but the eurozone crisis has put the market under pressure and in 2011 the prices both in Monaco and the French Riviera fell. London and Zurich are the only cities in Europe that registered an increase in prices and incidentally they are both out of the eurozone. London attracts the capital flight from across the world and it powers the city’s prime housing market. It has grown onto the ideal expat city for bad money from the Middle East to North Africa and the Russian oligarchs. The rich people in Greece and Italy looking to hide their cash from the tax man are also heading to London.
In stagnant economies when the real estate prices are driven up by wealthy foreign buyers it gives birth to socio political issues and growing demand to tax the rich. Geneva brings up the rear in the top ten list of the most expensive real estate at $3,000 per square foot. Monaco, despite the fall in prices has retained the top spot with prices prevailing at $5,400 per square foot. London is placed third on the list at $4,500 per square foot. The prime real estate is able to draw on new wealth being generated in the emerging world even in an uncertain economic scenario.