Whether you’re looking for a second home, a rental property or a complete relocation, a solid knowledge of global property markets, and which are the most expensive, is essential – especially as more and more companies adopt long-term home-working solutions. Fortunately, after one of the most tumultuous years in modern history, worldwide property sales are quickly heading back to normality.
As expected, there are some regions that not even a global pandemic or political unrest can shake: according to a recent report by Savills, Monaco remains at the top of the list as the most expensive place to buy property, thanks in no small part to its abundance of wealthy residents. However, while the housing market remained strong, Savills’ report was keen to note that travel restrictions meant that sales were primarily domestic throughout 2020 – potentially indicating that 2021 may be a bigger year than ever in the region, as well as the rest of the world, as overseas buyers return once more.
Find out below which other regions and cities topped Savills’ list of the world’s most expensive property markets and the key reasons that buyers flock to them, even in troubled times.
Monaco topping the list of the most expensive property markets in the world should come as no surprise, with the French principality long regarded as a playground for the global elite. However, while Monaco has clung to the top spot for another year, Savills’ report shows that the market has shrunk by 1.1% year on year to an average of €4,426.80 (approximately $5,262.80) per sq ft – nearly $1,000 more than the second in this list.
But what is it that makes Monaco’s property market so expensive? Firstly, its size: spread across a minuscule 0.8 square miles (making it smaller than New York City’s Central Park), Monaco is beaten only by the Vatican City in the battle to be crowned the world’s smallest country, putting prime real estate in high demand.
The ultra-exclusive lifestyle afforded by owning property in Monaco is another major contributor to the cost of buying in this coveted destination. The principality is brimming with fine-dining restaurants and designer boutiques, as well as a number of luxury yachting clubs – not to mention an extensive sporting calendar. If anywhere on earth has been designed specifically for wealthy individuals, it’s Monaco. The year-round sunshine, wealth-friendly taxes and prime location on the French Riviera don’t damage its immense appeal, either.
Hong Kong, Asia – $4,392.81 per sq ft
Despite a 3.9% year-on-year drop, Savills has reported that Hong Kong is the second most expensive residential property market (and the most expensive city) in the world, with an average prime capital value of €3,682.80 ($4,392.81) per sq ft. Interestingly, however, Savills anticipates that while other Asian cities’ property markets will grow, Hong Kong is likely to see a continued decline due to the uncertain political environment.
The density of population is a key factor that makes Hong Kong so expensive, with over 7.5 million people living in less than 430 square miles. And, despite the demand, new properties are scarce with the city clinging on to its limited green spaces. In addition to the limited real estate, Hong Kong’s status as a leading international finance hub has propelled the city’s housing market to become one of the world’s most expensive.
New York, US – $2,465.57 per sq ft
New York’s appearance on a list of the most expensive property markets in the world is another one that comes as little surprise. Despite the city’s devastating Covid-19 battle and reports of oversupply, as we entered 2021 property in New York City remained in high demand – and remarkably costly: as of December last year the average cost per sq ft was €2,064.60 ($2,465.57).
Several factors contribute to the cost of property in New York, most notably the lack of space; with virtually every bit of ground accounted for, the only way to build in the Big Apple is up and air space continues to be highly sought after.
Of course, aside from the development intricacies, one of the main reasons why New York’s property market continues to be so expensive is the city’s sheer curb appeal. While Washington, DC is the US’s political hub, New York is the home of everything else: from fashion and art to finance and tech, the city that never sleeps remains the place to be.
Tokyo, Japan – $2,650.05 per sq ft
Behind the bright lights of Tokyo’s most recognisable tourist spots and financial districts is an equally as prosperous – and increasingly competitive – property market. Savills’ report shows that the Japanese capital is the fourth most expensive area in the world when it comes to real estate with an average cost of €1,897.20 ($2,650.05) per sq ft.
Fortunately, while the start of 2020 hinted at Japan being badly hit by Covid-19, the country’s response has actually been hailed as one of the few success stories of the pandemic, with the avoidance of extreme lockdown measures ensuring that the property market remained comparatively stable. Tokyo’s most expensive residential neighbourhoods include Azabu, Omotesando and Toranomon.
Geneva, Switzerland – $2,123.16 per sq ft
While the Swiss capital of Zurich has its own impressively lucrative property market, it is the lakeside city of Geneva that has the world’s fifth most expensive with an average asking price of €1,776.30 ($2,123.16) per sq ft. To those in the know, the high property prices in Geneva, and indeed the rest of Switzerland, are a no-brainer. Geneva not only boasts immediate proximity to the Alps and the Jura mountains which are both home world-class skiing resorts, but also acts as a worldwide hub for diplomacy and finance.
However, the Swiss government has taken measures to regulate the country’s housing market, with regulations preventing non-residents from buying in areas that aren’t designated ‘holiday zones’. Unfortunately, Geneva doesn’t fall under this holiday zone category, meaning international buyers will need to relocate and obtain the relevant visa to buy property in the city.
Shanghai, China – $1,934.44 per sq ft
Despite not being its capital, Shanghai is China’s largest city and acts as its financial hub – and this allure hasn’t gone unnoticed by foreigners. In normal years, Shanghai attracts hordes of expats and while Covid-19 may have temporarily impacted the market, China’s comparatively quick return to normality is ensuring it remains one of the world’s most popular cities. The abundance of luxury shopping opportunities and a lucrative job market help seal the deal, too.
As a result, Shanghai is also one of the most expensive cities when it comes to property, with an average prime capital value of €1,618.20 ($1,934.44) per sq ft. However, with Forbes recently reporting that Shanghai is now the most expensive place to live globally and predictions that China will soon become the world’s largest economy, you can expect the city to hop up this list in coming years.
London, UK – $1,891.75 per sq ft
Although at one point the rise of homeworking threatened to undermine London’s appeal, this threat is yet to materialise with any lasting impact as, for now, the city’s property market remains strong. While Covid-19, Brexit and the ensuing economic uncertainties of both have prevented a rise in property prices, a fall in the UK capital is considered unlikely.
Savills reports that London falls just behind Shanghai with an average asking price of €1,581 ($1,891.75) per square foot. This makes it the seventh most expensive property market in the world, with the strong job market, abundance of culture and wealth of green spaces acting as some of the city’s main appeals. The same can’t be said for the rental market, however, with increased supply through 2020 meaning that London saw the largest rent decline of any European city.
Sydney, Australia – $1,767.95 per sq ft
Coming in at eight on Savills’ report of the most expensive property markets in the world is Sydney, where prospective buyers can expect to pay an average of €1,478.70 ($1,767.95) per sq ft, with the suburbs of the sprawling city proving to be more in demand than inner-city properties.
Of course, Sydney speaks for itself when it comes to explaining its ever-growing property market. Its oceanfront location, laidback lifestyle and unrivalled climate make it one of the world’s most desirable locations to live in – and Australia’s impressively effective Covid-19 response has made the city yet more appealing to prospective buyers, with lockdown measures kept to a minimum throughout 2020.