Hong Kong maintains its position at top of world's most expensive property markets: CBRE

Hong Kong remains the world’s most expensive housing market but price declines in Australia and the US have made room for European cities to climb into the top 10, new research shows.

New York, Los Angeles, Toronto and Vancouver all dropped down the rankings, allowing a number of European cities to move into the top 10, including Barcelona, Dublin and Paris, according to CBRE’s Global Living Report.

Sydney took out the 13th spot for average property price at $US537,891 ($749,981), representing annual growth of 5.4 per cent. Sydney’s average prime property price sits at 11th in the world, at $US900,966 ($1,256,217).

Hong Kong has maintained its position as the most expensive market with an average property price of an astonishing $US1,235,220 ($1,722,267).

The top four cities for highest average property price — Hong Kong, Singapore, Shanghai and Vancouver — remain unchanged year-on-year.

Last year’s report found Sydney and Melbourne demonstrating some of the world’s best growth, but this year’s results see the cities slipping.

Craig Godber, associate director of residential research at CBRE, said the dip was unsurprising given the massive growth Sydney had seen in recent years.

“We went through an exceptionally strong growth cycle,” he said. “We saw prices rise by 60-80 per cent over four or five years on the back of strong offshore demand. Which is feeding into a lot of the new unit developments.

“It’s really been a combination of the substantial growth that happened that was always going to correct somewhere along the line. And we’ve got a much tighter lending criteria now for purchasers and developers. On top of the foreign demand that’s come right off for the time being.

“It’s all those factors that have come together at once, effectively, to put us in a price correction cycle right now. “

In Melbourne the numbers paint a similar picture. The report puts Melbourne in 15th place with an average property price of $US433,336 ($604,200), representing 4.5 per cent price growth in the past year. Its average prime property price is 16th globally, at $US578,362 ($806,410).

Mr Godber said these numbers, similar to Sydney’s, were not a huge surprise.

“Melbourne went through [a spurt] not quite as strong as Sydney but not far off Sydney’s growth spurt. [It’s] had the strong economy with strong population growth that’s supported it and held it up quite well,” he said.

“But it’s now in that negative price cycle as well. It’s the same factors affecting all the markets around the country right now.”

Despite these dips across the country, Mr Godber said, the attention had shifted and not everything was doom and gloom.

“Over the next 12 to 18 months we’re going to see the buyer-side come back across all the markets. It’s the typical supply-demand cycle,” he said.

“While the market’s a lot slower in Sydney and Melbourne right now, the attention’s really turned to high quality owner-occupier stock as it has right around the country.

“[It’s] turned away from the pure investor stock, which is typical of where we are in the cycle. Markets right now are focusing on the higher quality owner-occupier [and] slightly smaller scale developments that might have been going up 12 to 18 months ago.”