The price of luxury housing varies from one city to another. This is proven by a new edition of Knight Frank's 'Prime International Residential Index', which analyses how many prime square metres can be bought with $1 million in a study of 20 cities. Monaco (17m2), Hong Kong (21 m2) and New York (33 m2) share the podium of the most expensive cities in the world, while Sao Paulo (231 m2), Cape Town (218 m2), and even Madrid (106 m2), are among the five cities where spaces of over 100 square metres are available.
If you are looking for luxury investment or are simply curious about the global luxury residential market, here is an interesting analysis of the prime housing value in the first quarter 2023 edition of Knight Frank's PIRI index, using 2022 closing price data.
As in previous reports, Knight Frank provides the square metres that can be purchased for a budget of $1 million in 20 major cities to measure luxury housing in these markets.
And for yet another edition, Monaco holds onto its title as the world's most expensive residential market. However, the strength of the dollar in 2022, due to the economic crisis following the war in Ukraine, has rewarded the US-dollar buyer with two additional square metres compared to a year ago. One can now buy up to 17 m2 in the Principality south of France for $1 million.
Hong Kong follows, where one can purchase 21 square metres, while New York (33 sqm) has overtaken London and Singapore (both 34 sqm), again due to the dollar's strength, but only just edging them out by one sqm.
Five other capitals are still below 50 prime square metres. These are destinations as varied as Geneva (37 sqm), Los Angeles (39 sqm), Paris (42 sqm), Sydney and Shanghai (both 44 sqm).
The most significant prime price growth over the past year was recorded in Dubai (44%), but values are rising from a lower price base and up to 105 square metres of luxury property is now available for purchase. Alongside Dubai, Madrid (106 sq m) and Mumbai (113 sq m) are above 100 square metres, while Cape Town (218 sq m) and São Paulo (231 sq m) are above 200 square metres, making them among the most "affordable" in this select club of luxury housing for $1 million.
Growth in the 'super-prime' housing market
On the other hand, New York (with 244 transactions) retains its crown as the most active market in super-prime housing transactions, i.e. those exceeding $10 million, or €9.1 million. It is followed by Los Angeles (225) and London (223). Meanwhile, Singapore and Hong Kong are confirmed as the most active Asian markets, with more than 120 super-luxury home sales, with Paris and Geneva joining London in Europe.
The average price of luxury housing increased by 5.2% globally, which puts it at 35% above 2009, the lowest point reached during the last financial crisis. Prices have not stopped rising since then, with an average of 1.6% until the Covid-19 crisis. But in the past two years, prime housing has shot up 8.4% in 2021 and 5.2% last year, as mentioned.
The markets are increasingly heterogeneous after the pandemic. There is now a difference of 68% between the most and least buoyant growth. "A much more nuanced picture is emerging as countries adopt different monetary policy strategies, introduce taxes or restrictions on buyers," the Knight Frank report notes.
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