Hong Kong has retained its place as the most expensive residential living location in the world with average prices of US$ 1,416 per sq ft being paid.
This accolade comes from CBRE’s Global Living Report: A City by City Guide, which lists London and New York in second and third position, with an average property price of US$ 1,025 per sq ft and US$ 842 per sq ft respectively.
Dr. Henry Chin, Head of Research for CBRE in Asia-Pacific, said, “While Hong Kong has cemented its place as the world’s most expensive location according to average price per sq. ft., we have seen the majority of cities across the region with a strong bounce-back in the residential sector following the global financial crisis.
“As the world’s population expands and the overall international economy continues to grow, we believe both factors underpin the fundamental demand for our region’s residential market. In Asia-Pacific, residential property markets are becoming more integrated due to globalization and migration–people are now sharing culture and ways of living with new audiences.”
The Global Living Report provides a snapshot of 31 cities around the world and provides a comparative study of house prices, rental growth and living costs.
The luxury market is performing well, with a 30 percent increase in prices for off-plan condominiums. Prices for older developments are stable as the majority of Thai buyers prefer new stock to existing building projects.
After massive growth in the 1960s and 1980s, Bangkok is now a major regional force in business, health care as well as an international hub for transport and an emerging regional centre for fashion and entertainment.
CBRE reported Bangkok is now home to an estimated 12 million of the nation’s 67 million people, with the average age of its residents being 37.5-years-old. Known for its cultural landmarks, temples and culinary experience it is one of the world’s top tourist destinations, second only to London in terms of international visitors according to the 2015 MasterCard Global Destination Cities Index with arrivals up 24 percent over the last year alone.
In terms of cost of living, Bangkok is very affordable; it will cost you the equivalent of £1.29 for a cappuccino, £1.23 for a beer, £13 for a meal for two and £27 for a monthly transport pass.
Overall, CBRE noted that Bangkok is a city that offers not only beauty, but vast opportunity, its relatively low prices and good standard of living making it very attractive and affordable by international standards.
The luxury market is performing particularly well with off-plan condominium prices up 30 percent over the year and resales of existing stock up 6 percent. Following these rises the average price of a property is now £139,850 (THB 7.63 million)
CBRE reported that one feature of the Bangkok condominium market is that the prices of older units do not rise at the same rate as newly-launched projects; in some cases they do not move at all. This is because most Thai purchasers prefer the better quality new stock.
It said condominiums were first built en-masse in 1989. Between then and the Asian financial crisis in 1997, more than 29,000 units were completed in downtown Bangkok. Many were built by inexperienced developers and the buildings were not well designed, both in terms of layout and specification. Some had poor entrance lobbies, sometimes located in the centre of the ground floor car park, common corridors were badly decorated, and unit layout designs were inefficient. Improving these buildings has been difficult and so they remain unpopular.
Underpinned by a return to economic stability, CBRE says the Bangkok residential property market offers good prospects for capital gains with new quality high-end and luxury projects in exclusive locations ensuring maximum capital appreciation over the long term.
This is supported by the city’s robust residential construction activity; building licenses were up by 11.9 percent during 2014.
The rental market is stable, it reported, with current downtown expatriate standard rents of £1,300 per month (THB 71,000 per month) after 3 percent growth over the last year and average yields of 4 percent
Bangkok is expected to witness population growth over next decade of 6.2 percent, adding to the almost 3 million current households in the Bangkok metropolitan area.
To read the full CBRE Global Living, Cities by Cities report click here.
