Real estate remains extremely important to the richest people in the world, as evidenced by the growth in demand for luxury homes in top cities like New York and London, claims a new Wealth Report by Citi Private Bank and Knight Frank.
Both cities remain at the top of the global cities index in the Wealth Report, with property accounting for around 35% of ‘High-net-worth individuals’ portfolios, coming second only to business investments.
Interestingly however, the report also shows that the world’s wealthiest people see Asian cities such as Mumbai and Shanghai slowly closing the gap on New York and London in the next decade.
Despite these positive indications, there were a number of cities where the value of property decreased quite significantly, such as Dublin, which saw a huge 25% drop, while property values in Dubai fell by 10%. Other cities, ranging from Los Angeles and Chicago to Abu Dhabi and Hanoi also suffered with falling prices and oversupply, causing those once booming markets to readjust.
Overall, 14 cities slid down the rankings in the report, while 16 moved up, including 8 cities from Asia, with Shanghai and Kuala Lumpur leading the charge. However, the western world also saw some success, notably in Munich, the city’s resurgence indicative of renewed confidence in the German economy, while Toronto and San Francisco also performed well.
The most expensive residential location in the world remains Monaco, trailed by London in second place.
According to the report, cities with the most appeal to investors in Asia are those that are seeing a strong recovery from the economic downturn.