Seven Asia-Pacific cities have the real estate X-factor


Singapore by Asnallar

Seven cities in East and South Asia, the Middle East and Australia make up more than half of ‘World City X-factor Ranking’, according to real estate consultancy firm Savills.

According to the study, global competitiveness, prominence, long-term appeal and stability have contributed to the real estate sector of Singapore, Hong Kong, Tokyo, Shanghai, Dubai, Sydney and Mumbai. Connectivity, web search rankings and international tourist arrivals are the other factors that determined the 2014 ranking.

The report also noted that Singapore—the world’s most expensive city—is currently tied in third place with Paris but is set to rival the top-ranking cities, New York and London, in the near future in terms of market performance. Tokyo, which takes sixth place, leads the residential and commercial real estate yield ranking and is “favoured by more adventurous investors.”

Mumbai, Hong Kong and Shanghai are identified as the world’s “hottest” property markets, with Hong Kong offering the best combined office and residential costs, while New York, Sydney and Moscow are the “coolest” markets, which are considered to have the biggest scope for growth.

“Non-prime mainstream housing stock is now an attractive buy for investors,” said Yolanda Barnes, director of Savills World Research. “On a world stage, London’s mainstream values look cool, while Dubai and Hong Kong look more fully valued.  We now expect that secondary and even tertiary markets in our world cities could offer superior growth compared to prime over the next five years,” she added.

Barnes named Istanbul, Hanoi, Kuala Lumpur, Jakarta and Bangkok as the second-tier cities to watch in the coming years that could offer good alternative to investors.

The Savills report compared the gross rental income to the ten-year government bond data in each country to determine the final list of twelve cities. The “investability” of these top-tier cities will shape the future of the world’s property market, the report noted.

Savills X-factor

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