Considering buying in London or New York or Paris and wondering how London compares to other global cities?
In this article, we’re going to look at London relative to other global cities and see how it compares in the eyes of buyers and property investors.
The Global Cities Index for 2020
Let’s start with this Kearny Global Cities Index for 2020. The GCI assesses how globally engaged cities are across five dimensions: business activity, human capital, information exchange, cultural experience, and political engagement.
The most recent rankings include 151 cities across all continents, compared to 130 in 2019, reflecting the increasing importance of emerging geographies such as the Middle East, China, and Central Asia
The top 4 cities have kept their spots since 2019 with London in the number 2 spot behind New York. Another notable comment is the big jump by Beijing which has been attributed to aggressive investment in human capital while becoming more stable.
Global Cities Outlook – what the future may hold
Now, what about future prospects? The Global Cities Outlook or GCO examines those creating the conditions for future status as major global players. This analysis covers four dimensions—personal well-being, economics, innovation, and governance — which are key determinants of a city’s ability to attract talented human capital, generate economic growth, increase competitiveness, and ensure stability and security, respectively.
Surprisingly London ranked at the top of the chart again, which goes to show that globally speaking even with Brexit and Coronavirus, the forecast and outlook is quite strong. There was a ton of movement throughout like in the case of Toronto, which climbed nine spots to take second place. For many of the rising cities according to the article, long-term investments in governance and economics have begun to pay off. This is particularly true of cities in China and the Middle East, which are rapidly catching up with their European and North American peers.
The Global Property Market
Now let’s look at the property market.
Since December 2019, at the start of the pandemic, house prices have increased by an average of 8% across the globe. Mortgage broker, Enness Global Mortgages, analysed house prices across 17 major cities worldwide and found that the major cities of New Zealand are leading the way with pandemic house price growth. At 28.9%, Wellington has seen the sharpest increase in house prices since the start of the pandemic, with Auckland not far behind with an uplift of 26.4%, and Vancouver has the third spot with house prices up 18.8% since the start of the pandemic,
So what about London? Despite the stamp duty holiday causing house prices to skyrocket across much of the UK market, growth in London has been more muted. However, house prices have still climbed 4.1% across the capital despite many homebuyers looking outside of London for more space at a more affordable price tag.
How does London compare to other cities when it comes to investment from overseas?
London comes in behind Berlin, Paris, Lisbon, and Barcelona. Investors are still attracted to destinations based on a country’s economic and financial stability which continues to drive London’s appeal. The article states that Asia-Pacific buyers account for 1.9% of London’s prime secondhand market between January 2020 and April 2021. This was a decline from 2.6% as some buyers are now attracted to new developments south of the river including Nine Elms.
How London property compares in price per square foot to global cities
Next up is Hong Kong at $4,392 per square foot, followed by New York at $2,465, then Tokyo at $2,265 and Geneva, Switzerland rounding out the top 5 at $2,165 per square foot.
London comes in at #7 at an average price of $1,897, just behind Shanghai. Sydney, Paris and Seoul, South Korea round out the top 10.
So, as you can see, even in the midst of a global pandemic, London continues to be a strong destination for international & domestic buyers. While Covid, Brexit, and economic uncertainty have kept property prices from rising over the last several years in prime central London, London has retained its global appeal. If you’ve got questions about buying or selling in London, please get in touch.