London luxury homes ranked globe’s priciest
Posted on Monday, September 4, 2006
LONDON — London’s luxury homes are now the most expensive in the world, experts say, with foreign buyers, salary bonuses and steady interest rates driving prices up in the capital’s overheated property market.
Prime residential property in London now costs the equivalent of about $ 2, 300 per square foot, compared with $ 1, 900 in New York, according to CB Richard Ellis Hamptons International.
And the so-called “super prime properties” in London are going for up to $ 5, 715 per square foot, compared with $ 5, 100 per square foot in New York.
“In terms of time zones and location, London is the most attractive place to be,” said Liam Bailey, head of residential research at the Knight Frank real estate agency.
Prices for central London homes worth more than $ 2. 9 million climbed 21 percent for the year ended Aug. 31, according to Knight Frank.
Foreign buyers own 51 percent of the $ 3. 8 million-plus market in London, Knight Frank research shows, compared with 34 percent of the equivalent market in New York and 27 percent in Paris.
The most expensive homes sold this year — a $ 62. 8 million house in Belgrave Square and a former office block on Park Lane — were sold by the Savills real estate agency to buyers from the Middle East.
In comparison, in Manhattan, home to the most expensive real estate in the United States, the average price of a luxury apartment — calculated from the top 10 percent of all transactions — was $ 5 million in the second quarter, down 3 percent from a year earlier when prices hit a record $ 5. 2 million, according to Miller Samuel.
The U. S. market boom is ending after 17 interest rate increases by the Federal Reserve.
In Britain, interest rates held steady for a year until a surprise increase last month.
Foreign buyers like London because of its position as the emerging global financial center and a strong tradition of ease of access and open communications, Bailey said.
“Over the past five or 10 years, London has gained a larger share of international financial activity,” he said.
“And, unlike other European financial centers like Frankfurt, buyers are attracted by all the other things the city has to offer.” Russians, other Europeans and Americans already are a strong presence in the London market, and Asian buyers are taking an increasing slice: The volume of Asian purchasers has grown 60 percent over the past five years, Bailey said.
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