Ranking the world’s best cities for luxury
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Whether it’s a 10,000 sq. ft mansion in Bel Air, or a classy penthouse in Monaco with a harbor view, the buyers of top-end real estate tend to be very particular.
In fact, the most robust markets for luxury real estate can be found concentrated in only a few world-class cities like Hong Kong, London, or New York, or in luxury destinations like Cannes or The Hamptons. These are all timeless locations that have the amenities and activities to appeal to large amounts of high net worth individuals.
But at the same time, what is trending at any given time is a lot less predictable. Only so many homes change hands every year, and they do so based on global macroeconomic trends, the political environment, changing tastes, speculation, and shifts at a local level.
In the luxury home market, one year’s boom is another year’s bust – it just depends on who is buying and selling, and why.
Price Disparity for Luxury
As with all real estate, pricing is not uniform across the board.
In the city-state of Monaco, it costs $5,420 per square foot for top-end real estate. Interestingly, the same space can be bought for a fraction of the cost for only $1,068 in Los Angeles or $831 in Hawaii (Kauai).
This is yet another factor to consider in where the rich are buying. Is it worth it to go a bit over the top and buy a house on The Peak in Hong Kong, or will a mansion in Singapore suffice at a 84% discount?
Timeless vs. Hot Markets
In a 2017 whitepaper from Christie’s International Real Estate, markets are ranked based on two ideas: the Luxury Index and the Luxury Thermometer.
The former rates timeless markets, like New York and Hong Kong, which tend to have the most luxury sales overall. The latter does so based on what’s “hot” and trending upwards in a given year. These may not necessarily be the biggest markets, but they are ones that are getting an influx of new activity and interest from buyers.
The Luxury Index
| 2016 Rank | City | Change from prev. year |
| #1 | Hong Kong | +1 |
| #2 | London | -1 |
| #3 | New York | - |
| #4 | Los Angeles | - |
| #5 | Singapore | - |
| #6 | Sydney | - |
| #7 | San Francisco | +1 |
| #8 | Paris | +1 |
| #9 | Toronto | +1 |
| #10 | Miami | -3 |
In the aftermath of Brexit, Christie’s noted that sales in London of $1 million+ primary homes declined by -35% in 2016. It’s no surprise then, that Hong Kong has displaced London as the top city for prime real estate sales according to the index.
The Luxury Thermometer
| 2016 Rank | City | Change from prev. year |
| #1 | Toronto | +1 |
| #2 | Victoria (Canada) | +1 |
| #3 | San Francisco | +1 |
| #4 | Austin | New |
| #5 | Charleston (S.C.) | New |
| #6 | Auckland | -5 |
| #7 | Paris | New |
| #8 | Portland | - |
| #9 | Sydney | -3 |
| #10 | San Diego | New |
The Canadian market continues to be madness, with luxury sales up 83%.
We previously documented Vancouver’s real estate mania, but the city has since implemented a 15% tax on overseas buyers. As a result, these buyers are turning increasingly towards nearby Victoria, BC, Canada, the #2 ranked city on the Luxury Thermometer in 2016.
Article by Jeff Desjardins, Visual Capitalist
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