The World’s Most Expensive Property Markets
Getting onto the property ladder has never been easy, but the recent economic climate, with its weakened consumer spending power and inflated property prices, has made the going even tougher. Even by these standards some locations are prohibitively expensive, leaving them as viable options only for the most well-off. Here are five of the world’s most expensive property markets.
Monaco is well-known to be the most expensive city in the world; a place where only the extremely wealthy can afford to rent or buy property. In recent years, it has been impacted by the Eurozone crisis, and property prices have fallen by around ten percent. Despite this, you would still pay £5931 per month on average for a 1291 square feet apartment.
So why is this tiny place so popular, and as a result – expensive? Well, the key reason for this is the fact that it is a tax haven, and residents can pay zero income on investments. Furthermore, the small size of the area means that competition for real estate is tight. Add on the interest driven by the yearly F1 grand prix and it’s not hard to see why prices are so high.
The British capital is currently known to be the second most expensive city in the world, with prices around 50% higher than the rest of the country. As the UK has seen house prices drop over the last few years, London has proven itself to be an extreme exception, with prices actually increasing by around five percent over recent years. Whilst the Eurozone crisis has had negative impacts on other cities in Europe, this has contributed to the increased interest and subsequent inflation of house prices in London. The average price for a 1291 square foot property in London is £5863 per month.
House prices in Bermuda have increased 175% in 15 years, so it isn’t hard to see why it is now one of the most expensive places to live in the world. A lack of availability of housing has pushed up prices simply through the basic mechanics of supply and demand, as 60,000 people live on the tiny island. This has now created a difficult situation whereby local people are struggling considerably to afford to buy their own homes. An average salary of $52,000 means that it takes 21 times the average salary to invest. The average price for a 1291 square foot property in Bermuda is £4182 per month.
Manhattan, New York
It is not surprising that people are drawn to the glamorous lifestyle of New York. However property prices mean it is becoming increasingly difficult to afford a home within the city. The reason behind the high prices are rising incomes, low-interest rates and increasing demand for accommodation within this desirable area. It is not just house prices that are expensive in Manhattan; a recent study showed that individuals would have to earn $123,322 annually to enjoy the same quality of life as someone making just $50,000 in Houston, Texas. The average price for a 1291 square foot property in Manhattan is £4057 per month.
Within the last five years, house prices in Hong Kong have doubled, leaving many residents now struggling to afford even modest sized houses in the city. Low borrowing rates, increased investment from China and a general lack of space have increased house prices significantly. It has further been argued that a chronic failure to turn industrial land use into affordable accommodation has worsened the issue, and trends look set to continue for years to come. The average price for a 1291 square foot property in Hong Kong is £4013 per month.
“The World’s Most Expensive Property Markets” was a post from the FX trading experts at Iron FX who have an eye for all things finance.