September 23rd, 2011
04:32 AM GMT
Hong Kong (CNN) – According to a report compiled by Savills, a global real estate consultant, Hong Kong has the world's most expensive luxury property market.
Of the 10 “world class” cities profiled—Hong Kong, London, Moscow, Mumbai, New York, Paris, Singapore, Shanghai, Sydney and Tokyo—the average £6,700 ($10,316) per square foot price of Hong Kong luxury homes was the highest in the world. Behind Hong Kong was Tokyo’s £5,190 ($7,991) price per square foot. Paris, with luxury flats averaging £3,270 ($5,035) per square foot, came in third.
The report noted that Hong Kong’s luxury homes were twice as expensive as London’s per square foot, and more than 10 times more expensive than Sydney’s.
Hong Kong’s sky-high prices are fueled by market demand for “trophy homes,” especially from Mainland Chinese investors, and the city’s limited supply, the report said. "Many more of the world's billionaires are being created in China, rather than in New York or London, and it is shifting the buying patterns," Yolanda Barnes, director of residential research at Savills, told the Financial Times.
The cost of luxury homes is rising fastest in “emerging ‘new world’ economies,” Savills reported. Prices for top-end homes in Singapore grew 144% since 2005. Prices in Mumbai rose 138%, while Moscow climbed 110% and Hong Kong grew 83% in the past six years. Shanghai’s relatively low 32% growth rate is attributed to the closed, domestic nature of its billionaire market, while other cities are able to attract international buyers.
While Hong Kong’s luxury homes snagged the first place in price per square foot, Savills’ report noted that luxury homes in Tokyo were the most expensive in total value, as they tended to be bigger, averaging 16,000 square feet. Tokyo is also home to the most expensive flat, an £83 million ($128 million) property, in any of the cities surveyed.
Of the 10 cities surveyed, only Moscow had smaller homes on average than Hong Kong, averaging 4,600 square feet and slightly over 5,000 square feet, respectively.
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