We often hear about the world’s most expensive property market, those where money is no problem, and the rich and famous reside. So, where are the most expensive property markets in the world and what are the trends going forward? In other words where is the wealth? Which markets are attracting both domestic and overseas real estate investment?
Cost of prime property
If we take a look at the graph below, you will see the spending power of $1 million when it comes to acquiring square metres of prime property in different areas. This is the most basic of indicators and gives you a good idea of where high net worth individuals invest in property. Are you surprised by any of the entries below?
It will likely come as no surprise to learn that Monaco, the strongest magnet in the world for the rich and famous, has the most expensive prime property market. You will be able to buy a paltry 16 m² of prime property in Monaco for $1 million. The next entry in the list is Hong Kong at 22 m² which shows that the Monaco market is 37% more expensive than its nearest competitor!
New York, London and Singapore always tend to feature heavily with regards to luxury property markets while many might be surprised to see Paris as low as number seven. We all know the Paris is the number one tourist destination in Europe and has a very active high-end real estate market. Further down the list we have Tokyo and Berlin and towards the bottom we have the likes of Cape Town and São Paulo. As you will see from the figures, the effective affordability of these markets varies enormous but Monaco is head and shoulders above any of them.
Global millionaire population
The graph below gives you a very interesting snapshot of the number of millionaires per 10,000 people across an array of different countries. Again, Monaco is head and shoulders above the rest then we have Switzerland, Singapore and Hong Kong in the next group. Interestingly, the likes of Sweden and Germany rank fairly well although the UK and the United States are probably lower than many people would have expected. However, it is worth reminding ourselves that these figures are spread across the whole population of each country.
It can be useful to take a look at the basic figures because they can show some very interesting trends. Who’d have thought that Ireland, with 160 millionaires per 10,000 people, would have ranked higher than the UK?
On the whole, North America, Europe and Far East/Asia account for the lion’s share of high net worth individual wealth. However, in recent times we have seen a significant increase in the number of high net worth individuals (those with in excess of $1 million in assets, excluding their main residence) in areas such as the Middle East and specifically Latin America. So, it is highly likely that we will see both finance companies and property investment companies taking more of an interest in these areas.
Whichever way you look at it, Monaco is head and shoulders above any other country/city state in the world when it comes to wealth and the number of millionaires. The fact that real estate in Monaco is just over 37% more expensive than the next in the list says everything. The increase in wealth across the Middle East and Latin America is an interesting trend which could dictate future property prices in these areas.