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Press Release

Most expensive real estate markets in 2009

Feb 06, 2009


No surprise - Monte Carlo is No 1 in the Global Property Guide's list of World's Most Expensive Residential Real Estate Markets 2009, more than twice as expensive, at US$45,000 per square metre, as the runner up.

Battling for the number 2 position are prime central Moscow and London.  Prime central Moscow's US$20,853 per square metre price tag slightly outpaces core Prime London's US$20,756 per square metre, though it is fairer to say the two cities are neck-and-neck.

London residential property prices have fallen for much of 2008, while Moscow property price declines only started in the last quarter, allowing Moscow to catch up with London. Both countries have experienced strong currency declines.

Most expensive property markets

(based on 120 sq. m. apartment in city-centre )
RANK COUNTRY CITY/REGION AVE PRICE (US$/sq. m.)
1 Monaco Monte Carlo 47,578
2 Russia Moscow 20,853
3 UK London 20,756
4 Japan Tokyo 17,998
5 Hong Kong Hong Kong 16,125
6 USA New York 14,898
7 France Paris 12,122
8 Singapore Singapore 9,701
9 Italy Rome 9,166
10 India Mumbai 9,163
Source: Global Property Guide (For the complete list, see below)

Tokyo and Hong Kong come in fourth and fifth, respectively.

New York, the only US city included in the survey , is 6th, with an average price of US$15,000 per sq. m.

Completing the top ten most expensive real estate markets are two European cities (Paris at 7th and Rome at 9th) and two other Asian cities (Singapore at 8th and Mumbai at 10th). Average prices range from US$9,000 per sq. m. to US$12,000 per sq. m.  

The figures are based on the average price of a 120 sq. m., good-condition high-end used apartment in the city centres of more than 110 cities around the world, typically the economic centres where most foreigners are likely to buy.  Data were collected during 2008. The US dollar exchange rate used is that of January 27, 2009.

Bargain hunters' dream


For global bargain hunters, there are several places where property prices are relatively cheap, for example parts of the Middle East, Latin America and Asia.

Cairo, Egypt is one of the cheapest cities in the world, with prime city centre prices at around US$600 per sq. m.  Another Middle Eastern capital in the bottom 10 is Amman, Jordan, with average city centre prices at US$1,150 per sq. m.

Least expensive property markets

(based on 120 sq. m. apartment in city-centre)
RANK COUNTRY CITY/REGION AVE PRICE (US$/sq. m.)
112 Egypt Cairo 574
111 India Bangalore 657
110 Chile Concepción 669
109 Ecuador Quito 820
108 China Chengdu 999
107 Nicaragua Managua 1,080
106 Indonesia Jakarta 1,102
105 Jordan Amman 1,150
104 Peru Lima 1,154
103 Chile Santiago 1,221
Source: Global Property Guide (For the complete list, see below)

Three Asian cities are included in the 10 cheapest, all located in rapidly growing and heavily populated countries, Bangalore in India, Chengdu in China and Jakarta in Indonesia.

Chengdu, damaged during the magnitude 8.0 earthquake in 2008, remains a vital economic, transportation and communication hub in the heartland of China.

Indonesia was the last country to recover from the 1997 Asian Financial Crisis. However, the economic reforms implemented by the Yudhoyono administration are setting the stage for steady economic growth.

Five Latin American cities complete the list of 10 cheapest cities for property buyers - Concepcion and Santiago in Chile, Quito in Ecuador, Managua in Ecuador, and Lima in Peru.

The same countries also tend to earn good rental yields.

Highest gross rental yields (%)

RANK COUNTRY CITY/REGION ANNUAL YIELD
1 Moldova Chisinau 14.17%
2 Egypt Cairo 12.00%
3 Indonesia Jakarta 11.27%
4 Philippines Manila 10.99%
5 Macedonia Skopje 10.11%
6 Peru Lima 10.09%
7 Panama Panama City 9.98%
8 Jordan Amman 9.73%
9 Malaysia Kuala Lumpur 9.22%
10 Colombia Bogota 9.19%
11 Nicaragua Managua 9.12%
12 Chile Concepción 9.04%
13 Netherlands The Hague 8.97%
14 Chile Santiago 8.87%
15 Argentina Buenos Aires 8.85%
16 Jamaica Kingston 8.80%
17 Ecuador Quito 8.77%
18 Bahamas Nassau 8.37%
19 Russia St. Petersburg 8.15%
20 Trinidad & Tobago Trinidad 8.14%
Source: Global Property Guide (For the complete list, see below)

Overvalued


Rental yields are generally below 5% in most European cities, suggesting that property is still overvalued.

Rental yields are generally below four percent in the following cities: Munich, Barcelona, Vilnius, Helsinki, Madrid, Rome, and Nicosia. Rental yields in Europe are lowest on Andorra at 2.2% and Athens at 2.7%.

Rental yields are between 4% and 5% in major cities such as  Brussels, Tokyo, Berlin, Moscow, Copenhagen, Warsaw, New York, Shanghai, Paris, London and Geneva.

Returns from rental investments are also relatively low in key Asian cities such as Singapore and Hong Kong and in almost all Indian cities (Bangalore,  New Delhi, and Mumbai)

Only six cities have rental yields of more than 10%, led by Chisinau with an average gross rental return of 14%. The Moldovan capital is followed by Cairo, Jakarta, Manila, Skopje and Lima.

High returns can also be expected in Latin American cities.  Yields range from 8% to 10% in Panama City (Panama), Bogota (Colombia), Managua (Nicaragua), Santiago (Chile), Buenos Aires (Argentina), and Quito (Ecuador). 

Rental yields in Kula Lumpur (Malaysia) and Amman (Jordan) are also typically above 9%.

House price movements


The recent house price boom and bust defeats the traditional notion that real estate prices are based primarily on local conditions.

The relatively low cost and ease of moving capital around the world has made it easier for people to invest in real estate markets in several countries. This is complemented by the relatively lower cost of international air transport. Several countries have also removed foreign ownership restrictions, a move encouraged by the Organization for Economic Cooperation and Development (OECD) and the European Union.

The result of these changes has been a remarkable increase in cross country real estate investments –  helping make the boom, and the bust, truly global.

 

Most expensive property markets

(based on a 120 sq. m. apartment )
  COUNTRY CITRY/REGION AVE PRICE (US$/sq.m.)
1 Monaco Monte Carlo 47,578
2 Russia Moscow 20,853
3 UK London 20,756
4 Japan Tokyo 17,998
5 Hong Kong Hong Kong 16,125
6 USA New York 14,898
7 France Paris 12,122
8 Singapore Singapore 9,701
9 Italy Rome 9,166
10 India Mumbai 9,163
11 Ireland Dublin 9,069
12 Finland Helsinki 8,404
13 Bermuda Bermuda 7,861
14 Greece Athens 7,858
15 UAE Dubai 7,151
16 Spain Barcelona 6,523
17 Montenegro Montenegrin Littoral 6,184
18 Switzerland Geneva 6,178
19 Luxembourg Luxembourg 6,165
20 British Virgin Islands British Virgin Islands 5,843
21 Barbados St. James 5,767
22 Spain Madrid 5,672
23 Russia St. Petersburg 5,527
24 Andorra Andorra 5,379
25 Germany Munich 5,255
26 Romania Bucharest 5,184
27 Slovakia Bratislava 5,088
28 Australia Sydney 4,994
29 Turks & Caicos Providenciales 4,963
30 Netherlands Antilles Sint Maarten 4,889
31 Netherlands Amsterdam 4,650
32 Italy Milan 4,624
33 Israel Tel Aviv 4,582
34 Czech Republic Prague 4,559
35 Saint Kitts & Nevis Nevis 4,463
36 Germany Frankfurt 4,407
37 US Virgin Islands Saint Thomas 4,324
38 Poland Warsaw 4,301
39 Puerto Rico San Juan 4,290
40 Antigua & Barbuda Antigua 4,275
41 Bahamas Nassau 4,078
42 Canada Toronto 4,007
43 Taiwan Taipei 3,968
44 Denmark Copenhagen 3,815
45 Slovenia Ljubljana 3,802
46 Latvia Riga 3,716
47 Estonia Tallinn 3,691
48 Malta Malta 3,656
49 Martinique Martinique 3,622
50 Poland Krakow 3,557
51 Switzerland Zurich 3,463
52 Cayman Islands Grand Cayman 3,352
53 Saint Lucia Saint Lucia 3,279
54 Belgium Brussels 3,267
55 Cyprus Limassol 3,265
56 Mexico Baja California Sur 3,227
57 Croatia Zagreb 3,215
58 Canada Montreal 3,211
59 India New Delhi 3,171
60 Saint Kitts & Nevis Saint Kitts 3,168
61 Trinidad & Tobago Trinidad 3,091
62 Germany Berlin 3,030
63 Greece Crete 2,981
64 Portugal Algarve 2,925
65 Netherlands The Hague 2,922
66 China Shanghai 2,918
67 Lithuania Vilnius 2,907
68 Portugal Lisbon 2,891
69 Bulgaria Sofia 2,877
70 Hungary Budapest 2,868
71 Cyprus Paphos 2,792
72 US Virgin Islands Saint Croix 2,689
73 Cambodia Phnom Penh 2,503
74 Curacao and Bonaire Curacao and Bonaire 2,459
75 Guadeloupe Guadeloupe 2,446
76 Brazil Rio de Janeiro 2,441
77 China Beijing 2,362
78 South Africa Cape Town 2,355
79 New Zealand Auckland 2,347
80 Argentina Buenos Aires 2,293
81 Cyprus Nicosia 2,256
82 Thailand Bangkok 2,238
83 Lebanon Beirut 2,229
84 Belize Belize 2,220
85 Cyprus Larnaca 2,174
86 Morocco Marrakech 2,043
87 Philippines Manila 1,914
88 Dom. Rep. Puerto Plata 1,872
89 Brazil Sao Paolo 1,860
90 Uruguay Montevideo 1,753
91 Vietnam Hanoi 1,749
92 Panama Panama City 1,740
93 Jamaica Kingston 1,654
94 Costa Rica San Jose 1,602
95 Chile Viña Del Mar 1,586
96 China Guangzhou 1,526
97 Aruba Aruba 1,443
98 Colombia Bogota 1,402
99 Malaysia Kuala Lumpur 1,347
100 Moldova Chisinau 1,316
101 Macedonia Skopje 1,303
102 Turkey Istanbul 1,291
103 Chile Santiago 1,221
104 Peru Lima 1,154
105 Jordan Amman 1,150
106 Indonesia Jakarta 1,102
107 Nicaragua Managua 1,080
108 China Chengdu 999
109 Ecuador Quito 820
110 Chile Concepción 669
111 India Bangalore 657
112 Egypt Cairo 574
Source: Global Property Guide < Back

 

Highest gross rental yields

  COUNTRY CITY/REGION ANNUAL YIELD
1 Moldova Chisinau 14.17%
2 Egypt Cairo 12.00%
3 Indonesia Jakarta 11.27%
4 Philippines Manila 10.99%
5 Macedonia Skopje 10.11%
6 Peru Lima 10.09%
7 Panama Panama City 9.98%
8 Jordan Amman 9.73%
9 Malaysia Kuala Lumpur 9.22%
10 Colombia Bogota 9.19%
11 Nicaragua Managua 9.12%
12 Chile Concepción 9.04%
13 Netherlands The Hague 8.97%
14 Chile Santiago 8.87%
15 Argentina Buenos Aires 8.85%
16 Jamaica Kingston 8.80%
17 Ecuador Quito 8.77%
18 Bahamas Nassau 8.37%
19 Russia St. Petersburg 8.15%
20 Trinidad & Tobago Trinidad 8.14%
21 Thailand Bangkok 7.97%
22 Uruguay Montevideo 7.56%
23 New Zealand Auckland 7.46%
24 Guadeloupe Guadeloupe 7.31%
25 Vietnam Hanoi 7.13%
26 Costa Rica San Jose 7.06%
27 Hungary Budapest 6.84%
28 Canada Montreal 6.77%
29 Netherlands Amsterdam 6.63%
30 Morocco Marrakech 6.56%
31 Brazil Sao Paolo 6.56%
32 Brazil Rio de Janeiro 6.48%
33 Canada Toronto 6.48%
34 Turkey Istanbul 6.47%
35 South Africa Cape Town 6.32%
36 Australia Sydney 5.96%
37 Romania Bucharest 5.54%
38 UAE Dubai 5.50%
39 Slovenia Ljubljana 5.49%
40 Puerto Rico San Juan 5.32%
41 China Guangzhou 5.21%
42 China Beijing 5.14%
43 Lebanon Beirut 5.13%
44 Israel Tel Aviv 5.13%
45 Croatia Zagreb 5.07%
46 Bermuda Bermuda 5.05%
47 Czech Republic Prague 5.02%
48 Switzerland Zurich 5.00%
49 India Bangalore 4.91%
50 Belgium Brussels 4.90%
51 Cambodia Phnom Penh 4.88%
52 Japan Tokyo 4.86%
53 Germany Berlin 4.80%
54 Italy Milan 4.72%
55 Bulgaria Sofia 4.62%
56 Russia Moscow 4.61%
57 Denmark Copenhagen 4.61%
58 Germany Frankfurt 4.60%
59 Poland Warsaw 4.60%
60 Latvia Riga 4.40%
61 USA New York 4.37%
62 Barbados St. James 4.37%
63 China Shanghai 4.36%
64 Estonia Tallinn 4.36%
65 Slovakia Bratislava 4.28%
66 Luxembourg Luxembourg 4.28%
67 China Chengdu 4.28%
68 France Paris 4.26%
69 UK London 4.12%
70 Poland Krakow 4.10%
71 Switzerland Geneva 4.09%
72 India New Delhi 4.05%
73 India Mumbai 4.02%
74 Germany Munich 3.97%
75 Singapore Singapore 3.97%
76 Cyprus Nicosia 3.76%
77 Spain Barcelona 3.75%
78 Chile Viña Del Mar 3.74%
79 Hong Kong Hong Kong 3.73%
80 Lithuania Vilnius 3.70%
81 Finland Helsinki 3.69%
82 Spain Madrid 3.67%
83 Cyprus Larnaca 3.64%
84 Italy Rome 3.62%
85 Greece Crete 3.57%
86 Cyprus Limassol 3.45%
87 Malta Malta Island 2.85%
88 Cyprus Paphos 2.83%
89 Greece Athens 2.71%
90 Taiwan Taipei 2.38%
91 Andorra Andorra 2.19%
Source: Global Property Guide < Back

 

Rental Yields Frequently Asked Questions:

  1. What does rental yield mean? Why is it important?

    The gross annual rental income expressed as a percentage of today's property purchase price. This is what a landlord can expect as return to his investment.

    The rental yield is one useful yardstick of whether property is over-valued or under-valued.

  2. What assumptions are made in presenting the Global Property Guide price and rents data?

    We are interested in the sort of properties which will be attractive to foreign renters. This is not always the same type of property in all locations.

    Foreign renters are usually interested in properties which are in excellent condition, with good facilities, and which have been refurbished or redecorated within the last five years. Our properties are therefore likely to be less expensive than the very newest properties, except where new-builds dominate the market.

    In European cities, we lean towards properties in the historic city centres, therefore our typical property is more likely to be a 90-year old refurbished apartment of character, than a newly built apartment.

  3. What are the sources of the Guides price data? Can these sources be trusted?

    We draw our figures from our own, in-house analysis. Our research is based on a simple yet effective method we systematically scan web advertisements for residential property, looking at offers for sale, and offers for rent, of good (but not new) apartments.

    Despite its simplicity, with care and commitment to consistency this method can produce quality results. We begin by defining key upper-end rental districts in the capital city. We take care to keep a database of where the properties are located, so as to ensure consistency in subsequent years. We carefully select appropriate price ranges. We take average prices, rejecting deviant outliers. Buyers of the full data set have access to these comparability specifications.

    The data measures up well to data provided by national statistical organizations, where these are available for comparison, and usually performs better than multi-housing organization data.

References:
The Global Property Guide is an on-line property research house. On-line newspapers, magazines, etc which use material from this release MUST provide a clickable link to www.globalpropertyguide.com. Sites found not providing the link will be removed from our press list.

Terms of Use:
On-line newspapers, magazines, sites, etc wishing to use material from this press release MUST provide a clickable link to www.globalpropertyguide.com Sites found not to be providing the link will be removed from our press list.


Publisher and Strategist:
Matthew Montagu-Pollock
Phone: (+632) 867 4220
Cell: (+63) 917 321 7073
Email: editor@globalpropertyguide.com

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