To most people, New York City has become an otherworldly real estate market. It’s the town where a skyrise condo just sold for more than $50 million—and it was only that cheap because it was raw space.
But to the global rich, New York is a bargain.
A new report shows that on a per-square-foot basis, New York is half price compared to some other favorite cities of the rich.
The Knight Frank Wealth Report shows that the tiny, tony principality of Monaco remains the most world’s expensive real estate market. The report found that $1 million will only get you 15 square meters of space, or about 160 square feet. So you could buy a $1 million bedroom—and presumably share a bathroom and kitchen with other property-poor millionaires.
In New York, that same $1 million gets you a whopping 30 square meters of space, or about 419 square feet. That puts New York down at number six on the list, below Monaco, Hong Kong, London, Singapore and Geneva.
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“New York is a definite bargain from the global marketplace perspective,” said Dolly Lenz, founder of Dolly Lenz Real Estate in New York. “It’s not a bargain from the perspective of New Yorkers who have seen the prices quintuple over the past dozen years. But the wealthy look more globally, and when they compare these cities, New York is great value.”
But the report—done by London-based real-estate firm Knight Frank along with research firm WealthInsight—had other interesting tidbits when it comes to the global wealthy and real estate. They include:
Biggest price gains. The city that had the biggest price increases for luxury real-estate was Jakarta, Indonesia, with prices up 38 percent for prime, luxury real estate. Auckland, New Zealand, ranked second, at 29 percent, while Bali, Indonesia, ranked third, with prices up 22 percent.
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The darling of the rich. London is the favorite city of the rich. The study ranks cities by their attractiveness to the rich based on four criteria: economic activity, quality of life, knowledge/influence and political power. London ranks first in the world, followed by New York. The two cities always dominate the top of the list (they are like the Gates and Buffett of rich cities), and they are basically tied.
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But, as seen in the chart below, the study projects New York will eventually retake the lead.
|2||New York||New York||London|
“History, location and their long established wealth mean that London’s and New York’s positions remain unassailable,” the report said, adding that New York will soon get an edge from political power and economic activity.
The Skyscraper Index. Knight Frank also ranks skyscrapers by the capital value of upper-story floor space. Hong Kong ranks first, with a value of $69,222 per square meter. Tokyo ranks second, with around $40,000 per square meter, followed by New York at around $25,000.
—By CNBC’s Robert Frank. Follow him on Twitter @robtfrank.