HK trophy homes the world's most expensive
Hong Kong is the most expensive city in the world when it comes to billionaire trophy homes, according to a report by Savills, the international property consultant.
'Billionaire properties in Hong Kong average GBP6,700 [HK$81,778] per square foot,' said the report, which calculated a price index of homes for the super rich in 10 top cities around the world.
Tokyo ranked second at GBP5,190 per square foot and Paris third at GBP3,270 per square foot.
Rounding out the list were London, Moscow, New York, Shanghai, Singapore, Mumbai and Sydney. Savills described these cities as prime metro areas in their respective countries that attracted billionaires.
The square-foot price of Hong Kong's trophy homes is more than double London's and over 10 times the price in Sydney, the cheapest location for billionaires that Savills charted. The report said that while genuine overall demand is strong, evidenced by rental increases, the desire for 'trophy assets' is stronger in Hong Kong. That's due to a huge demand for investment properties from mainlanders, coupled with restricted supply, Savills said.
According to CB Richard Ellis, luxury residential prices on Hong Kong Island rose 7.3 per cent quarter on quarter to an average of HK$27,451 per square foot in the second quarter. But the rate of appreciation in luxury residential prices moderated over the second quarter, against 15.8 per cent growth in the first three months.
Savills said there was some difficulty in measuring residential real estate prices across continents because of the way people live, what they expect and a difference in the size and style of their homes. To adjust for the differences, the property consultant took what it called a typical 'executive unit' - a group of people that might start up or expand a global business in any country. They then compared the residential accommodation they would be likely to choose in each of the 10 cities.
'It is by comparing the accommodation costs of these people that we can truly compare the cost of residential real estate across some very different global cities,' the report's authors said. The people who made up Savills' 'executive unit' included a middle-aged expat chief executive, a senior expat director, a locally employed director and four locally employed administrative staff.
From December 2005 to December 2010, the average price of trophy homes in the 10 cities rose 65 per cent, the study found. Singapore rose the most at 144 per cent, then Mumbai at 138 per cent, Moscow at 110 per cent, and Hong Kong at 83 per cent.
In the first six months, the homes of the super rich in the top 10 cities rose an average 10 per cent. This compares to average price growth of 6 per cent for ordinary properties in the same cities. Tokyo was second in price per square foot, but given the larger size of its trophy homes, Savills put it first in absolute value with a top trophy home going for GBP83 million.