(Bloomberg News) Hong Kong has the world's most expensive average home prices for billionaires, with per square foot value of those properties almost double that of London, according to a survey conducted by Savills Plc.
Homes bought by billionaires in Hong Kong cost 6,700 pounds ($10,360) a square foot at the end of June, a 10 percent climb from six months earlier, London-based Savills said in an e- mailed statement today. That compares with 5,190 pounds in Tokyo, 3,270 pounds in Paris and 3,090 pounds in London, the brokerage said. Sydney, which had the lowest value among top 10 markets, posted the biggest price gain, jumping 40 percent.
The 10 most expensive cities in the survey saw prices of those homes rise by an average 10 percent in the first half. The real estate market of the 10 cities, which also include Moscow, New York, Shanghai, Singapore and Mumbai, "have more in common with each other than the mainstream markets" of their own countries, according to Savills.
The housing market for billionaires will continue to fare better than other cities, driven by a global commodities boom, according to the report.
Demand will also be driven by political turmoil and war, which "will ensure that there is continued demand from the international elite for safe havens," the group said. Billionaires will seek properties in both "old world cities" including New York, Paris and London, and "new world cities" such as Hong Kong, Shanghai, Singapore and Mumbai, Savills said.
The number of millionaires in 10 major Asian economies will more than double to 2.8 million by 2015, with 1.4 million high net worth people in China, according to a Julius Baer Group and CLSA Asia Pacific Markets report on Aug. 31 that covered China, India, Thailand, Indonesia, South Korea, Taiwan, Hong Kong, Singapore, the Philippines and Malaysia. Chinese millionaires will hold $8.76 trillion of the $15.81 trillion that these countries' rich are expected to have, it said.
Growth in leisure or second-home properties has been more subdued, climbing 33 percent between December 2005 and June 2011, compared with a 77 percent increase for city properties during the same time, Savills said.
"Second homes nestled in the city's hinterland are more prone to the condition of the domestic, and even the rural economy than the wealth being generated in the city state," Savills said. "Leisure property is a discretionary purchase and was one of the first luxuries to go in the downturn."