New research suggest 12 rising property markets are set to outstrip established cities as prices and demand rises in places like London, Hong Kong and New York.
Many investors simply do not have the cash to buy expensive prime properties in world cities, says new research.
Instead, they are turning to secondary markets where select homes are cheaper and and in plentiful supply.
Many of these investors have earned their wealth in Germany, the USA and Japan, according to research for international property firm Savills.
Traditionally, five cities scoop more than 40% of property investment by the super rich worth 31.3 trillion.
Champions and challengers
Hong Kong leads the way with £470 billion spent on property. Much of the cash comes from a new moneyed class in China, says the study.
Next is London, with around £400 billion of global property investment owing to Britain’s safe haven political and economic status.
Moscow, Singapore and New York split the rest.
The challengers for a slice of this wealth are:
- Tel Aviv, Israel
- Melbourne, Australia
- Miami and Chicago, USA
- Dublin, Ireland
- Panama City
- Beirut, Lebanon
- Istanbul, Turkey
- Cape Town, South Africa
- Jakarta, Indonesia
- Lagos, Nigeria
- Chennai, India
“Investors are looking beyond prime property in the top cities as prices rise and property supply peters out,” says the report.
Shifting investment focus
“Now the wealthy are shifting focus away from these destinations to other markets. Undoubtedly, property investment is a key asset for the ultra-wealthy and we are now seeing other cities beginning to challenge the more traditional markets.”
Savills believes that looking towards emerging property markets will trigger increasing investment gains for the wealthy in the same way as equity investors have profited from similar markets in recent years.
Research director Yolande Barnes said: “The values of real estate in the world’s leading property markets is topping out and investors need to become bolder in their choices if they want to make money. This is leading them to look for better yields in countries with second-tier cities and burgeoning economies.
“Our view is this will give better rent returns and capital growth as property prices around the world increase with improving economic strength after the recession.”
The survey also revealed that many of the emerging markets have similar characteristics for investors – like English as a leading language, growing financial and technology sectors and destinations for multinational companies.
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