Recent research has revealed that Hong Kong continues to be one of the most expensive cities in the world in which to live, with residential property prices in the SAR being the highest in the world.
According to the Autumn World Cities Review survey that was published by property brokerage firm Savills, the prices in Hong Kong, which rose by 7.4 percent last year, reflect the city’s ability to weather the financial storm that has rocked the rest of the world. Second behind Hong Kong was London, which saw a 2.8 percent rise in the price of property last year.
Other high risers in the price of property over the last year were named as Moscow, which rose by 5.5 percent year on year; Sydney, at 3.7 percent and London at 2.8 percent. Elsewhere, property prices in Paris fell by 3.4 percent, as the city continued to struggle as a result of the Eurozone crisis.
According to Savills, over the last year Hong Kong has exhibited both the highest residential housing costs and the fastest pace of growth, although there are indications that the prices of top-notch executive rentals are softening.
Savills estimated that a company that relocated a core team of financial services staff, consisting on seven employees, including a chief executive and accompanying administration staff could expect a total bill of approximately $1.1 million USD per year in Hong Kong, compared with $880,000 in London.
In addition to highlighting the cities with the highest residential prices, the Autumn World Cities Review also addressed the phenomenon of “new world” cities, such as Shanghai, Moscow and Mumbai. Their report indicates that the future of property in these cities depends upon their ability to continue to generate wealth that is subsequently invested in the property market: “Emerging markets, and Chinese buyers in particular, still have the potential to move other world city markets,” said Yolande Barnes, director of Savills Global Research. “Last year we said that the unleashing of high net worth Chinese investor monies could boost London’s prime markets by 15% and the same must be true of other top cities, but this will require the relaxation of currency export controls and overseas ownership restrictions.
“By contrast, China’s lead world city, Shanghai, will need to see its market adjust to a more sustainable domestic consumption model in the future before significant price growth can resume.
“What is clear is that – whether boosted by international or domestic wealth-generation- the select band of cities that are measured in our index have increasingly more in common with each other than with their own domestic markets or economies.”