Europe

London property the world's most expensive

(Reuters)
Updated: 2007-05-08 17:19

LONDON - London is home to the most expensive property in the world, followed by Monaco, New York and Hong Kong, a new report shows.

Prime property in the British capital costs 2,300 pounds per square foot, just above Monaco, playground of the rich and famous, at 2,190 pounds, according to estate agent Knight Frank and Citi Private Bank's "Wealth Report 2007".

A press photographer takes pictures at an exhibition of Marilyn Monroe property at Christie's auction house in London in this undated file photo. A New York federal judge has ruled that Marilyn Monroe's right of publicity died when she did in 1962, paving the way for family members of the late photographer Sam Shaw to continue selling and licensing images of the icon, including the photo of her standing above a subway gate. [Reuters]

It points to the growing influence of high net worth individuals - defined as those with more than 5 million pounds in investable assets - on the property market across the globe.

Its index charting the value of similar property at the top end of the market in more than 70 locations ranks New York in third place, with prime property fetching an average price of 1,600 pounds per square foot, and Hong Kong in fourth, commanding 1,230 pounds.

Tokyo, Cannes, St Tropez, Sydney, Paris and Rome make up the top 10.

Elsewhere in Great Britain and Ireland, Dublin, Birmingham, Edinburgh and Manchester are identified as prime locations.

They ranked 17, 19, 21 and 22 respectively, with values ranging from 320 pounds to 470 pounds per square foot.

Knight Frank said central London prime property prices had outperformed the mainstream regional and national markets in recent years - a pattern repeated in the rest of the world.

Prices for the most expensive properties rose on average by more than 14 percent in 2006 compared to a 9 percent rise in the mainstream market.

But although London has seen prime market growth of more than 30 percent in the past year alone, this has been dwarfed by growth seen in the main Russian, Chinese and Indian city markets - where prices have soared by 40 or 50 percent.

Rapid economic development, together with the creation of new wealthy sections of society, had led to intense competition for the best apartments and villas in secure prime neighbourhoods - and boosted prices, according to the report.

Looking ahead, Liam Bailey, head of residential research at Knight Frank, said prime property would continue to outperform mainstream markets.

"Over the next five years, we believe the trend of growing wealth and greater wealth concentration will continue," he said.

"There will be a significant demand and supply imbalance in the best prime market locations.

"Price growth this year will be lower than in 2006, although we predict prime markets will outperform mainstream markets by quite a margin."

He said up-and-coming key prime property locations included St Petersburg and Moscow in Russia, Delhi and Mumbai in India, as well as Guangzhou and Beijing in China.