Experts say Paris is the city with the most potential to compete with
London for foreign property investors. However, it was dealt a dual blow
in 2012 by the euro zone crisis, and the new socialist government's
proposed 75 percent wealth tax. As a result, property prices fell by 4
percent.
President Francois Hollande's proposals caused more than a few potential
buyers to reconsider, and some owners to leave the country. The market
saw buyer interest shift to Monaco, the Italian Riviera and Switzerland,
according to Knight Frank.
4. Geneva
$2,720–$3,010 per sq. ft. ($29,300-$32,400 per sq. m)
Average price change in 2012: -6.0%
Prime property prices fell by 6 percent in Geneva in 2012, due in part
to stricter mortgage policies and uncertainty regarding a new set of
laws and taxes.
However, Knight Frank said prices in Switzerland are set to rise again,
as the country is forecast to see a 27 percent rise in its high net
worth population between 2012 and 2022. Strict planning regulations will
also curtail new developments in hotspots like Cologny in Geneva, where
the house pictured is located.
Geneva's on-going popularity is explained by its position as a global
financial center, its excellent schools, safe environment and the Alpine
ski resorts on its doorstep, plus Switzerland's political stability.
3. London
$3,890–$4,300 per sq. ft. ($41,900-$46,300 per sq. m)
Average price change in 2012: +8.7%
One of the most renowned safe haven markets in the world, London
property prices increased by 8.7 percent in 2012, despite a new stamp
duty tax on properties worth over 2 million pounds ($3 million).
The London property market was fueled by money from continental Europe
in the first half of 2012. Then as fears the euro might collapse
dissipated during the summer, Europeans buyers were increasingly
replaced by those from the Middle East, Asia, Africa and Russia.
The property boom looks set to continue in 2013, with the average price
of prime central London property rising by 0.9 percent in February, the
highest rate in 10 months, according to Knight Frank. Prices have risen
every month since November 2010, and are now 55 percent above the March
2009 market low.
"London is like a separate economic zone, it is the global investment
destination of choice among global investors at the moment and I think
that will continue," Richard Tice, CEO of property investment company
CLS Holdings, told CNBC.
A recent Vanity Fair article on the owners of London apartments, such as
the 6,000 ($9000) per sq. ft. one pictured here, read like a
cross-section of some of the world's richest people, including Arab
sheikhs, Nigerian oil billionaires, and supermodel Naomi Campbell's
Russian oligarch boyfriend, Vladislav Doronin.
2. Hong Kong
$4,570–$5,050 per sq. ft. ($49,200-$54,400 per sq. m)
Average price change in 2012: +8.7%
The Hong Kong property market is so hot the government is fighting to
cool it down. Despite new restrictions - notably an extra 15 percent
stamp duty for foreign buyers, including those from mainland China - the
rate of price increase almost doubled in 2012 to 8.7 percent, up from
4.6 percent in 2011.
A million dollars will only get you about 200 square feet (19 square
meters) in Hong Kong, with a villa on The Peak, such as the one pictured
here, costing considerably more.
Knight Frank put the city's popularity down to strong demand from both
local and international owners, and investors who see the city as an
international financial hub with a strategic geographic location and a
liberalized economy.
Nevertheless, the government cooling measures are expected to impact
property prices and Knight Frank forecast prices will move up or down by
5 percent.
1. Monaco
$5,350–$5,920 per sq. ft. ($57,600–$63,700 per sq. m)
Average price change in 2012: 2.0%
The principality of Monaco has a reputation for being a playground for
the super-rich. With only 36,000 people, it is renowned for its casinos,
yacht-filled marinas and the Formula One Grand Prix.
The price of its property reflects this. A million dollars will buy you
only about 170 square feet (16 square meters) in prime central Monaco,
with housing developments such as the Tour Odeon, pictured here, going
for roughly €60 ($77.90) per sq. m.
Top-end real estate in Monaco has benefited from a shift away from
Paris, with prices up 2 percent in 2012 after France proposed a 75
percent top rate of tax. In addition, neither individuals nor companies
resident in Monaco pay income or business tax, making it likely to
remain a favorite destination for investors looking for safe haven
assets.