Liam Bailey, head of Knight Frank's residential research team, is quoted as saying that Monaco, London, Cap Ferrat (on the Cote d'Azur), Courchevel (in the Alps), New York, Moscow, Tokyo, Hong Kong, Sydney and Paris still occupy the top ten positions when judged on their residential property prices – and these, Bailey indicated, have remained surprisingly resilient despite the credit crunch.
Properties in Monaco now average some £3 950 per square foot and those in London are only just below this.
What is more, these averages, added Bailey, hide the fact that prices in both Monaco and London broke new records prior to the latest stock exchange falls, with £5k, £6k and £7k prices per square foot having recently been achieved.
Bailey does now expect the prime property markets to be dragged down by the ongoing financial fallout but he points out that even in Manhattan, which one expects to be disastrously affected by the current problems, properties rose 12,3% in value year-on-year (y/y) until June this year.
"Our view is that the fundamental economic facts point to continued support (for top level property). Demand is not going to evaporate, wealth creation in emerging economies and in specific sector activities will continue and the flight to quality will remain constant."
Right now, with prices 35% of their 2007 levels, it could pay those with a yen to invest in Europe to consider a small vineyard in France's Bordeaux/Dordogne area, Steward says.
"A 30% population shift away from the country districts to the French cities and a massive oversupply of wine (which may necessitate the elimination of 200 000 ha of vineyards in Europe) have made the Dordogne vineyards a good buy."
For more information contact Lanice Steward on 021 671 9120 or send an email.
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