Fame, fortune, and real estate investment shaped the world's top '12 cities.'

New York and London have been ranked as the world's leading international cities, according to a new research by international real estate advisor Savills called 12 Cities. apartment for sale in pearl qatar

Cities are classified by Savills based on their popularity and fame, as well as their economy and size; elements that will influence the cross-border investability of their real estate, as well as their existing 'world class' city status.

 

 

 

1. New York is ranked first in Savills' global '12 Cities' list.

 

 

 

Shanghai is number seven on the list.

 

8. Dubai 2. London

 

9. Sydney 3. Paris

 

10. Mumbai 4. Singapore

 

Hong Kong is the number five.

 

Moscow, number eleven.

 

Tokyo is ranked number six, while Rio de Janeiro is ranked number twelve.

 

The Savills' 'X-Factor' world city characterisation used a mixture of global competitiveness, connectivity, foreign tourists, and online search data to assess overall world city classification in 12 cities. Using these parameters, Singapore and Paris begin to challenge New York and London, while Moscow, Mumbai, and Rio de Janeiro are less-established global leaders in the top tier of twelve cities studied.

"Our definition of a world city is based on a number of less visible qualities, not only size or economic prosperity," explains Yolande Barnes, director of Savills World Research. "These factors include notoriety, prominence, international reach, and investability, all of which cannot be determined solely by population and GDP data. These intangibles have an impact on a city's appeal to businesses and wealth creators, which determines the rate of residential and commercial real estate market expansion and contraction, as well as market stability."

"The redrawing of the global economic map is affecting real estate markets significantly. The expansion of 'new world' economies, such as China and India, has recently slowed, but older industrialized economies, such as the United States, the United Kingdom, and Japan, are currently recovering more quickly than many analysts expected."

"As a result, the 'new world' cities' explosive real estate boom has slowed and, in some cases, reversed, as in Mumbai and prime Hong Kong. Dubai's high-growth real estate center exemplifies the strength of investment markets in emerging regions. Its resurgence reflects a market that has recovered from severe price adjustments following the financial crisis of 2008."

Investment Indicators

The Savills X-Factor overall city classification may not necessarily represent traditional economic or real estate costs and values, but it does speak to a world metropolitan destination's long-term stability and attractiveness. The top three X-factor cities are likewise in the top four for residential real estate investors, but they are also in the top four for employee live-work prices.

Savills has compared gross rental income to the income available from 10-year government bonds in each country to create a 'net of gilt' yield to better understand the genuine attraction of residential and commercial real estate as an asset class in each metropolis. They claim that this provides a realistic gauge of real estate performance in comparison to the risk environment in the area.

By this metric, Tokyo offers the best bond returns, and it has begun to attract more daring investors who recognize the unique characteristics and hazards of Japanese real estate markets. New York, too, has relatively attractive gross yields, which has piqued investor interest.

Savills identifies Hong Kong, Shanghai, and, most significantly, Mumbai residential real estate values as most vulnerable to adjustment in its report Taking Market Temperature In 12 Cities. New York and Sydney appear to be the markets with the most room for expansion, while London and Dubai residential pricing, particularly in the cities' prime markets, tend to be higher than average, but still lag behind the hottest cities.

"Investors are now attracted to non-prime mainstream home stock," Barnes says. "London's mainstream values appear cool on a global scale, whereas Dubai and Hong Kong appear to be more fully valued. Over the next five years, we expect secondary and even tertiary markets in our global locations to outperform prime."

The worldwide expansion in asset values will surely decrease as the tapering and eventual collapse of quantitative easing takes effect. Rental and capital growth are expected to re-align in the future.

We predict the biggest stress in overstretched markets in the short term in Asia, as bond yields and interest rates are more likely to rise there than in the industrialized West.

Some second-tier cities, which are not yet included in our list of the world's top twelve cities, offer good value and may begin to gain traction among investors. Istanbul, Hanoi, Kuala Lumpur, Jakarta, and Bangkok, as well as many more significant, second-tier cities in the same nations, are among the cities Barnes recommends keeping an eye on (that few in the West will ever have heard of).

The following are some of the key findings from the 12 Cities report:

New York and London are ranked first and second, respectively, in Savills' world city X-factor rankings. Paris and Singapore are ranked third.

Residential real estate investment yields are ranked first in Tokyo, second in New York, and third in Paris, with the lowest returns in Mumbai, Moscow, and Rio.

Commercial real estate investment yields are ranked first in Tokyo, second in Sydney, and third in Paris; commercial real estate investment yields in Shanghai, Mumbai, Dubai, and Rio are all lagging gilts.

Costs of both the office and the home totaled: First place goes to Hong Kong, second place goes to London, and third place goes to Paris.

Getting a feel for the market:

Mumbai, Hong Kong, and Shanghai are the three most active marketplaces.

New York, Sydney, and Moscow are among the most exciting marketplaces.