What beat Hong Kong to become the world's most expensive city to buy a luxury home?
Monaco remains most expensive city to buy a luxury home for the 11th year running, with US$1m buying a paltry 16 square metres, followed by Hong Kong at 22 square metres, New York at 25 square metres and London at 28 square metres
Buyers with US$1 million to spend on a high-end home can secure just 22 square metres (237 square feet) of residential space in Hong Kong, making it the second most expensive city in the world to buy a luxury place of your own.
If investors were scouting for a high-end residential property in Monaco, the same price tag would give them just 16 square metres.
The low-tax haven with a shortage of ongoing new construction – perched on the northern end of the French Riviera – Monaco is the most expensive city to buy luxury residences for the 11th consecutive year, according to “The Wealth Report 2018” produced by international property consultant Knight Frank.
Following hot on the heels of Monaco and Hong Kong are New York and London, where US$1 million burning a hole in your pocket would secure you 25 and 28 square metres, respectively.
In Singapore, the comparable figure would be 39 square metres, 41 square metres in Geneva and 45 square metres in Paris, according to the 12th edition of the report, which provides a global perspective on prime property and wealth and price performance data for 100 luxury property markets.
Real estate asset values have surged around the world, reflecting the expansion of the global economy last year and nine years of ultra-low interest rates, despite heightened political tensions in various troubled hotspots.
In 2017, overall second-hand home prices increased 2.1 per cent, compared with 1.4 per cent in 2016, according to Knight Frank’s housing price index, which tracks the performance of the world’s 100 leading prime, second home and city residential markets.
Two thirds of the locations recorded static or positive annual price growth last year, with 11 per cent posting double-digit returns, according to the index.
Shanghai is China’s most expensive city in which to buy a luxury home and the ninth in the world, with US$1 million buying 54 square metres of prime residential space. In the capital Beijing, that budget would buy 77 square metres.
But price growth in the country’s top two first-tier mainland cities moderated, plagued by tighter regulations introduced by the government, which have largely managed to douse speculative activity, curbing price inflation across large parts of mainland China.
Guangzhou, the southern powerhouse, led those rankings with prime prices up by over 27 per cent last year, thanks to its relative affordability compared with other first-tier mainland cities.
The report shows the number of ultra-wealthy people (those with net assets of US$50 million or more) rose by 10 per cent last year, taking the global population of such people to 129,730, with a combined worth of US$26.4 trillion.
The number of individuals with net assets of over US$50 million will have grown by a further 40 per cent by 2022, thanks to the anticipated growing global economy, it predicts.
Knight Frank said the methodology for calculating wealth took into account GDP growth, the performance of stock markets, currency and other investments, as well as wealth distribution trends.