HK world's fourth most-expensive place to purchase a city-centre flat
Hong Kong has surpassed New York and Paris to become the fourth most-expensive city for buying a 120 square metre (1,291 square foot) apartment in the city centre, according to the latest global research.
Although overall property prices dropped 23 per cent between March and September last year, the research by the Global Property Guide shows Hong Kong climbed two notches in the global ranking from No6.
The guide tracked price trends in 89 leading cities around the world last year and found Monaco to be the most expensive, with an average price of US$45,713 per square metre for a 120 sqmetre apartment.
The average price for a similar unit on Hong Kong Island had risen 27 per cent to US$16,052 per square metre last year from US$12,599 in 2007. This was 1.27 per cent higher than in Tokyo, the fifth most expensive city.
A 120 sqmetre flat in Hong Kong's city centre cost roughly the equivalent of 26 units of similar size in Cairo, the cheapest among the major cities worldwide.
Ricky Poon, the director of residential sales at property consultant Colliers International, said it was not surprising to see Hong Kong leapfrog New York and Paris.
'It was inevitable to see property prices around the world drop significantly after the global financial crisis. New York's property prices suffered the most, as the economy has been hit by the crisis directly,' Mr Poon said.
He said prices fell faster in other big cities than in Hong Kong, and the city was expected to remain among the top five in the next survey.
London ranked second, with a price of US$23,837 per square metre, while Moscow took the third place at US$16,739.
New York and Paris were sixth and seventh, respectively. They were placed second and fifth in the previous year.
Because of a 19 per cent drop in average prices, Shanghai fell in the rankings to 60th from 26th.
Hong Kong was the sixth most expensive city in which to lease a 120 sqmetre flat last year, with an average rent of US$5,982 per month.
At US$9,815 a month, London was the most expensive city in the world.
Alva To Yu-hung, a director of property consultancy DTZ, said Hong Kong's luxury homes had attracted many mainland buyers, and the prices had been supported by the short supply.
'You may buy the most luxurious residence in Shanghai. But next year, you will find another, better unit,' Mr To said.
Although prices of luxury homes would probably drop more than those in the mass market this year, houses on the Peak and in Island South and special units would fare better and fall less than 20 per cent.
'Prices of apartments at Kowloon Station or in the Mid-Levels will drop more than 20 per cent this year, as the areas have plenty of supply,' Mr To said.
