World's most expensive luxury real estate markets

The housing boom, which spread across many of the world's finest luxury destinations, is finally tailing off. Still, prices in London, Monaco, Manhattan, and in famous European beach resorts and ski resorts continued to climb last year, as the pool of wealthy buyers from places like China, India, and Russia grew. Price growth is slowing even in Russia with its growing population of oil millionaires.

A 35% increase last year in home prices in prime locations of Moscow might sound impressive. But prices had jumped about 75% in 2006.

In the following slides, the price per square foot is an average for prime residential properties in selected luxury locations around the world. The annual price change compares the fourth quarter of 2007 with the fourth quarter of 2006.

Verbier (Switzerland)

Price: $2,325 per sq. ft.

What you get for $1.5 million: 1 bedroom

Annual price change: 6% Prices for vacation homes in this resort in the Alps have been pushed up by skiing enthusiasts, particularly from Britain. A one-year moratorium, which banned foreign property purchases, was lifted last year.

Price: $6,191 per sq. ft.

London

What you get for $1.5 million: Small studio apartment

Annual price change: A housing boom began in Central London in September, 2005, and continued through 2007, as wealthy buyers flowed in from around the world. The annualized growth for prime real estate is slowing this year and is expected to weaken further. But the super-luxury segment remains incredibly strong.

Sales for £10 million-plus homes in Belgravia, Chelsea, Knightsbridge, and Mayfair increased by 190% in the six months ending January, 2008, compared with the same period a year earlier. The annual price change compares the fourth quarter of 2007 with the fourth quarter of 2006.

Monaco

Price: $5,888 per sq. ft.

What you get for $1.5 million: Studio apartment

Annual price change: 25% It's not just the casinos, beautiful people, and staggering views of the Mediterranean that have made Monaco a popular home for the world’s wealthiest buyers. The real appeal is that its residents don't pay income tax.

Price: $2,692 per sq. ft.

Portofino (Italy)

What you get for $1.5 million: 1 bedroom

Annual price change: 14% Although there's no beach, the harbor of this resort village on the Italian Riviera is packed with yachts owned by the world's rich and famous. The village is about 20 miles from the Genoa airport.

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Elite homes, by invitation only

In a radical departure from conventional positioning exercises in the real estate sector, the Rs 10,000 crore Ambience group is attempting to reverse conventional marketing models by restricting access to only select buyers — by invitation.

And in doing so it begs the question: is merely being expensive — or even extremely expensive — enough to bag the “luxury” tag? When it comes to real estate at least, it may not. Land values in congested metros can distort pricing to an extent where merely being costly or difficult to acquire does not put a property in the “luxury” bracket.

In its tony integrated township, Ambience Island, coming up in Gurgaon, near Delhi, Ambience is planning to sell 250 premium condos only to buyers who have been invited to invest there.

"It's not just about money. It's all about creating the right surroundings," says Kochhar A., managing director. The group plans to ask a "neutral panel" to select "invite" buyers who will have the requisite comfort levels, not just with the neighbourhood, but the neighbours as well.

Kochhar is not worried about the possibility of upsetting potential customers.

"Luxury is relative. For somebody driving a Maruti 800, a Honda City might be luxury. But then again for somebody else, whose basic car is a Mercedes, the benchmark is different. The key to answering the question is quality and innovation."

Ambience, which is developing the two biggest malls in the National Capital Region area — the 8 lakh sq ft Ambi Mall in New Delhi and the 18 lakh sq ft Ambi Mall in Gurgaon, is also likely to be the first to market with a retail innovation.

Platinum Tower, a separate island within its Gurgaon mall, is planned as the country's first dedicated mall for super-luxury brands, with restricted access.

When asked whether this might affect footfalls, key to any retail business, Kochhar said that the group will drive entry by holding coordinated activities.

"Besides," he says, "we are not looking at today. By 2015, the market might change so much that even this might be too small."

via HT