Global real estate consultant Savills has launched a new international billionaire property index covering ten cities. According to the Savills report, Hong Kong has emerged as the world’s most expensive city in terms of billionaire property. The other cities that figured in the Savills study were London, Moscow, Mumbai, New York, Paris, Singapore, Shanghai, Sydney and Tokyo. This is a mix of traditional billionaire property markets and emerging cities drawing billionaire interest. The choice of cities represents changing trends in the luxury property market. Billionaires can live pretty much anywhere in the world. Luxury homes in places of business are going fast.
Yolande Barnes, director of residential research at Savills spoke about the ten “world class” cities featured in the Savills report. She said that the ten cities have “more in common with each other than the mainstream markets of the countries in which they operate”. She also added that the real estate markets of these cities are attracting investment from domestic and international billionaires. According to the Savills report, the price of international billionaire properties rose by 10 percent in the first half of 2011. It is a big spurt when compared to the 6 percent increase experienced by non-luxury real estate over the same period.
Predictably, Hong Kong has emerged as the frontrunner in this study. The world’s most expensive city for billionaire homes boasts of average figures of £6,700 per square foot. Tokyo comes in second with rates of £5,190 per square foot. Paris is a distant third with a going rate of £3,290. Compare the other cities and it becomes clear that the rates at Hong Kong are double those in London and ten times those in Sydney.
However, despite the high price points, luxury homes in Hong Kong are smaller than cheaper properties around the world. On an average, the billionaire property buyer in Hong Kong will get an apartment of 5,000 square feet. It still is larger than the Moscow average of 4,600. In terms of size, the Hong Kong homes pale in comparison to the likes of Sydney and Tokyo where the average size of a luxury home is 20,000 square feet and 16,000 square feet respectively. Sydney is the cheapest destination for billionaires looking to buy luxury homes in the big business cities of the world.
Emerging economies have also pushed up the annual growth rate of property prices. Singapore and Mumbai clocked the highest growth at 144 percent and 138 percent respectively. Moscow and Hong Kong followed at the third and fourth slots with respective increases of 110 percent and 83 percent. Given these figures, it is surprising that Shanghai managed to grow by only 32 percent. But China’s closed economy and unwillingness to allow in international billionaires is primarily responsible for the low price growth.
Traditional markets like New York, Paris and London continue to figure in the top 5 of this list of most expensive cities. However, their lower price growth is an indication that they could soon be ousted by the new emerging cities of Hong Kong, Mumbai, Moscow and others. That ouster will take time however. In 2010, London experienced inward investment of £3.3 billion while Paris has registered a sharp rise in prices in recent times.
Via: CNN
