Most expensive real estate markets in 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.