London, New York to remain top cities for another decade: report
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London and New York will continue to hold "top city" positions for another 10 years, says the sixth Wealth Report 2012 by Knight Frank and Citi Private Bank.
The quality of life, knowledge and influence, and economic activity are the key factors for the ultra-wealthy investing in property, the report says.
The reports said that London, New York, Hong Kong and Paris are seen as the most important world cities for high-net-worth individuals (HNWIs).
Meanwhile, Beijing and Shanghai are the cities with the most rapid growth in importance to HNWIs.
HNWIs from the Middle East and Africa rate Dubai as the location with the most rapid growth in importance, with HNWIs from Latin America rating Miami and Sao Paolo as strong contenders for future influence.
Personal security (63 per cent) now ranks above economic openness (60 per cent) in HNWIs’ choice of cities to live.
Monaco remains the most expensive residential location in the world, with one square metre there now worth $58,300 (fourth quarter 2011), followed by the prime locations in Cap Ferrat, London and Hong Kong.
The Wealth Report 2012 confirms the relentless shift in wealth distribution towards Asia-Pacific: the region covering China, SE Asia and Japan now has more centa-millionaires (those with over US$100m in assets) than North America or Western Europe.
Emerging economies have continued to build their huge influence on the real-estate markets in established locations: wealth flows from developing economies underpinned prices across the leading prime markets in North America and Europe, including Miami, Vancouver and London in 2011.
Knight Frank and Citi Private Bank expect further growth in interest in commercial property from HNWIs, forecasting US$74.1 billion of private transactions globally in 2012 (a 5 per cent year-on-year increase).
The 2012 edition of The Wealth Report, launched this week by Knight Frank and Citi Private Bank, highlights the increasing influence of global wealth flows on prime property and investment markets.
The newly wealthy from the world’s fastest-growing emerging economies rate stability, business transparency and education systems as the most important factors in a global city; prices of luxury housing in locations with this magic formula have been underpinned by their interest.
In Europe, despite the past year’s continental recession, the main luxury market hotspots have remained relatively hot – eight out of 10 top locations in the Knight Frank Prime International Residential Index (PIRI) price rankings are in the UK, France or Switzerland.
Prime property is a key part of portfolios – 2011 saw a global increase in allocation to real estate of 19 per cent; the largest climbers in 2011 popularity for investment were bonds (+65 per cent) and cash (+60 per cent).
According to the report’s unique Attitudes Survey, lifestyle and investment remain the key drivers for luxury second-home purchases, with 16 per cent of all HNWIs surveyed already owning a ski chalet, and 40 per cent a beachfront property. The US and UK are the top second-home destinations for the rich.
