Inflation rates dictate how much spending power your money has. Your million dollars do not have the same value compared to ten years before, particularly when you want to purchase a property. The Wealth Report published by Knight Frank, a real estate brokerage firm from London, stated that global growth has influenced how the wealthy purchased their properties. Many of them enjoyed higher yields as healthy real estate growth was observed across most markets.
When it comes to real estate, square footage will dictate your money’s spending power. How much square feet can your US$1 million buy you? If you want to buy real estate in global cities, this is what your US$1 million can buy you.
Brazil is one of the top countries where you can invest in property markets. The country has low property prices and higher rental yields, particularly in Sao Paulo. In the country, you can purchase a 176 square metre home with your money. In the previous year, it could have bought you 10 square metre more. If you prefer Cape Town in South Africa, it can buy you a 158 square metre of a luxury estate.
A global favourite and newcomer into the property market is Dubai. Many investors are taking an interest in investing in the country for its affordable real estate. A million dollars can purchase an upscale 162 square metre apartment in one of the country’s most prestigious addresses, Downtown Dubai with daily views of the outstanding Burj Khalifa.
About 10 years ago, US$1 million can buy you a beautiful 155 square metre of property in Melbourne, however, as of December 2018, your money’s buying power diminished by allowing you to buy a 97 square metre of real estate.
London ranked fourth in most expensive real estate. You can purchase a 28 square metre of property, about 2 metres less from last year’s prices. In Los Angeles, an increase in property prices reduced the square footage one can buy compared to last year. Today, your US$1 million can buy approximately 57.6 square metres from last year’s 61 square metres. New York is still a prime property market, with your million dollars buying you a 26 square metre hot property.
Hong Kong is still an expensive market. Since the demand for property in China’s Special Administrative Region is skyrocketing, property values are higher. US$1 million can buy you a measly 20 square metre of property. Do note, however, that in the same report, Hong Kong is forecasted to experience price falls in 2019. Lower growth is seen in Hong Kong as taxes and restrictions affect investors’ buying freedom. The new vacancy tax and higher borrowing costs push developers to rush in selling empty properties. Since the country relies heavily on the dollar movement, the rise in interest rates in the US will also prices to plunge. Involvement of regulators in the property market can cause more price falls by as much as 10%.
Monaco remains as the most expensive country to buy a property. Your money can only buy you about 16 square metres.