Saturday, 31 March 2007

London is the most overpriced city in the world

Just how far out-of-whack are London property prices? Compared to other major cities, London real estate could well be on another planet. The Canadian real estate company - Century 21 - recently undertook a survey of property prices worldwide. London didn't just come out on top; prices were multiples higher than other comparable cities.

The 10 most expensive housing markets for executive home buyers, along with a typical house price in the downtown business districts, are as follows:

London, UK, $5.68-million;
New York, $2.5-million;
Vancouver, $1.55-million;
Sydney, Australia, $1.4-million;
Paris, $1.39-million;
Seoul, $1.25-million;
Calgary, $1.2-million;
Nicosia, $1-million;
Toronto, $890,000
Victoria, $850,000

The survey also considered prices in terms of square foot in downtown business districts. Again, London was way out in front. Home buyers working in the downtown business districts will have to pay per square foot:

London, England, $3,156;
Paris, $1,163;
Seoul, $1,097;
Calgary, $800;
Sydney, Australia, $722;
Taipei, $613; Vancouver, $574;
Athens, $491;
New York, $480;
Tokyo, $385.

But what exactly will homebuyers get for their money. Again, the survey is helpful. Here are some typical home purchases across the world's most expensive cities:

"In New York, a typical executive choice would be a five-bedroom, five-bath 5,200-square-foot home on a 20,878-square-foot lot priced at $2.5 million in Roslyn Heights, Long Island, and 45 minutes to the Wall Street financial district by subway or car.

In London, England, a typical executive choice would be a two-bedroom, two-bath, 1,800-square-foot penthouse apartment in fashionable Notting Hill priced at $5.68 million, a 30-minute drive to the financial district and a 15-minute stroll to Kensington Palace and Gardens.

In Paris, a typical executive choice would be a three-bedroom, one-bath 1,195-square-foot duplex apartment in the city centre priced at $1.39 million and a three-minute walk from the Sacre Cour Basilica.

In Seoul, a typical executive choice would be a four-bedroom, two-bath, 1,139-square-foot apartment in Gangman district on the south side of the Hangang River priced at $1.25 million and a 30-minute commute to the business core.

In Sydney, Australia, a typical executive choice would be a three-bedroom, two-bath 1,938-square-foot penthouse apartment in Pagewood priced at $1.4 million, 20 minutes from the downtown and 15 minutes from the Sydney Opera House.

In Tokyo, a typical executive choice would be a four-bedroom, two-bath 1,722-square-foot home on a 1,884-square-foot lot at Yokohama City priced at $663,109 and 45 minutes by train to downtown Tokyo."

Cities across the world are suffering from housing bubbles. However, London is in a completely different league. What can't go on, won't; London will crash.

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