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The world’s infrastructure has been developing steadily over the years. There have been a plethora of tall buildings and towers across the globe, adding to the architectural beauty. Not just being an architectural marvel, but these high-rise structures mark for the global visibility of nations worldwide.
Let’s discuss some of the tallest residential buildings across the world. And, if real estate interests you, this piece is definitely going to be a good read for you.
Tallest Residential Buildings in the World
1. 432 Park Avenue
The first in our list is from New York., 432 Park Avenue. Located in Manhattan, this sky-high beauty overlooks the famous Central Park in the city and is built in the spot, where the Drake Hotel once stood. Rising to a height of 425.5 meters, Park Avenue has a footprint of more than 2800sq.mtrs. It is the second tallest building in the city with 84 stories, each measuring an area of 8000sq.ft.
Rafael Vinoly was the first person to bring up the idea of building Park Avenue and its interiors are the work of Deborah Brake and the firm, Bentel & Bentel. The building also has a fun theory that the building is an inspiration from an Australian designer’s fancy trash can.
2. Princess Tower
The above-mentioned cities are always abuzz with commercial activity. But these geographically-diverse places are also socially, politically, and culturally very different. Comparing two different markets is always a tricky art.
Shares and stock price indices are valuable but do not reveal much. A more reliable technique would be to compare affordability indices. The price income ratios as well as rental yields are also trustworthy indicators. Besides, we can always look at the average property price levels.
If you go by sheer expenses, Mumbai, Hong Kong, and Delhi take the cake. The Indian cities are populous with 20 to 30 million people, while Hong Kong only has 7.4 million population. London with 10.5 million inhabitants follows suit. While Singapore and Sydney with 5 to 6 million people each are also not very affordable.
Dubai with only 2.8 million citizens is very well affordable and makes up as the best option, while the US cities are not bad either. New York, San Francisco, Los Angeles, and Miami – in that order – are relatively investor-friendly compared to other cities of the country. The populations in these metros are also in the 20 million down to 6 million range.
Investors and rent collectors want their properties to compete effectively. They also want profitable returns reassuringly. If we go by commercial viability, then nothing beats Dubai. Los Angeles, Hong Kong, and Singapore are not far behind either.
San Francisco has become less significant due to lowered demand. Indian cities like Delhi and Mumbai also promise moderate success only. Sydney and Miami have also lost favour with the investors.
The economic ranking suggests a mature and reliable real estate market. In this regard, the properties of New York, Los Angeles, and Dubai rule the roost. Surprisingly, Indian and Singapore markets are also doing well here. The highly expensive Hong Kong city is going through socio-economic troubles as well as political unrest.
But San Francisco and Miami are expected to shine once again. Experts however caution investors and homebuyers about Sydney and London. The prices in London in particular have plunged and the major real estate players are taking corrective actions.
A city’s prime properties have to add value to an investor’s portfolio. A high ranking in the real estate destination list indicates a safe investment. Again, New York and Dubai dominate because of their mature real estate market, while Delhi, Mumbai, London and Miami are not finding much favor.
The residential and commercial properties in Hong Kong and Singapore still find takers, while the major investors are more circumspect about Sydney and San Francisco. The fall in rental prospects has affected some of these cities, while changing workforce dynamics has slowed down a hi-tech destination like San Francisco.
For the first time since the 2008 financial crisis, the global economy has slowed down drastically. Slowing down of economies across the world, as well as the trade wars between the USA and China, have created great uncertainty. The 37-member OECD predicts a paltry growth of 3% due to unpredictable macro-economic factors.
A major FDI destination like the United Kingdom has not been spared either. In the last couple of years, the investments dropped from US$ 44 billion to US$ 19 billion. Builders here are attracting global investors into the residential market segment.
They are also offering hostel properties fit for rentals at reduced prices. The government has also lowered the stamp duty on luxury properties. They also reduced the tax burden on medium and low-cost house purchases. How the market forces react will become clear in the next couple of years.
In the first quarter of 2019, India attracted US$4.2 billion into the realty market. Market observers predicted a rise of 5% up to US$ 6.5 billion by 2020. Global wealth managers have promised investors a whopping return of 100% to 300% on investments.
Indian market dynamics are very peculiar and there is a lot of complexity. The property segment is not too dissimilar and there are many influential factors. Sluggish real estate growth has created a lot of doubt among investors. But compared to the US or Europe, India is still a relatively very attractive proposition for buyers.
Experts say that the global portfolio managers are getting influenced by short-term possibilities. If they look at the long-term returns, Mumbai and Delhi are still very viable. But, investors are being circumspect due to price mechanisms, liquidity, credit transactions, and risk-benefit issues.
Global capital flows into the Asia-Pacific region have been very high in recent years. Direct investments into real estate markets are healthy. Commercial assets are being acquired using private wealth, pooled funds, and multiple accounts.
Sydney, for example, has been a global top 30 shopping destination. Hong Kong is a big challenge due to exorbitant prices and domestic, political troubles. But experts say commercial properties in this part of the world are still very beneficial.
The global investments in the last quarter of 2019 fell by more than 2%. The previous year the market volumes rose to a spectacular US$769 billion. By the end of third quarter of 19-20 financial year, the global commercial property investments had a total value of US$326 billion.
The real estate investments worldwide also peaked up to US$800 billion. A large number of countries adopt the US-based RIET model. The investors pool their wealth and focus on rental properties and leased spaces. And, real estate becomes their most significant asset class in a diverse investment portfolio.
The sales in the housing market have dropped by 11% to 15%. Recently, the property prices have also reduced by 2% to 3% nationwide. This trend is expected to continue until the end of the year 2021. The local markets with higher prices and net incomes have created a complex dynamic.
When it comes to global investments Dubai and New York are the leaders. Los Angeles, Hong Kong, and Sydney are next in line. However, Miami and Indian metros of New Delhi and Mumbai have failed to win the investors’ trust.
San Francisco and Singapore are still seen as a viable global destination for real estate purchases and leases. The city rankings themselves do not give a clear-cut indication. You have to delve deeper into the median property prices as well as the type of housing or leased land.
Other Key Comparisons
1. Mortgage as a percentage of income
Mortgage as income percentage is very high in India, London, Hong Kong, and Singapore. The values range from 140 to 470, indicating exorbitant costs. Dubai, Miami, and Los Angeles values are more manageable at 36 to 53. These values point to borrowing difficulties and financial hardships as well. More is the value; more is the difficulty in the process.
2. Price to Income Ratio
This is a very good measure of housing affordability in major cities. Since rents and wages are related to prices and incomes, higher affordability value is preferred. It indicates long-term viability, low financial risk, and sustainable development.
Dubai, Miami, San Francisco, and Los Angeles are faring very poorly in this matter. Sydney, New York, and New Delhi are moderately affordable at best, while the indicator is registering higher values for London, Singapore, Mumbai, and Hong Kong.
3. Gross Rental Yield
The gross rental yield percentages reveal a property’s profitability. Investors and analysts consider both centrally located properties as well as the suburbs. Hong Kong, Singapore, Mumbai, and New Delhi are at the lower end of the spectrum.
Investors recover the rents better in New York, Dubai, San Francisco, and Sydney. While London, Miami, and Los Angeles throw up multiple challenges. Those who look into all these variables will succeed in achieving higher returns on investment (ROI) in the long run.
Things to keep in mind when investing in the real estate markets
Buyers and investors have to be wary and look for the best properties. One important criterion that can influence their decisions is the global real estate value. In the last five years, Middle East and China have become dominant players. China has even surpassed the USA with assets worth US$ 42.7 Trillion.
But the USA market is still reliable as it holds onto the second position. Its total market value is estimated to be US$ 42.1 Trillion. The other noteworthy countries include Brazil, Russia, India, and Japan. European giants like UK, German, France, and Italy are more mature and reliable. But they too have to compete hard to gain the global investors’ trust.
These markets have a combined total value estimated at US$ 56.8 Trillion. This is almost 28% of the global property estimates. However, the future projected value is not sufficient to fully comprehend a specific market. You also have to look into the percentages of stock volumes that are traded.
China and Russia are on a weak footing on this significant front. Their foreign investments and economic progress have slowed down. In comparison, the mature markets of the USA, the UK, he Middle East and Germany are doing well. Their stock turnover has been registering healthy values ranging between 4% and 6%.
Industry experts list four prominent features or qualities that ensure great returns on investment(ROI):
1. Market Maturity
Properties worth millions are bought and sold around the world. Investors, traders, and agencies compete to generate billions in revenues. In such a scenario, the maturity level of the market is crucial. Political uncertainty and trade wars make Russia and China less enticing destination than the UK or the USA segments.
The top real estate countries are making their fiscal and monetary policies more attractive to the investors. They offered subsidies, mortgage relief, and temporary rental discounts. Those who can prevent liquidity shock will recover faster and regain consumer confidence in the next few years.
3. Transparent Deals
The South East Asian and South American markets are considered opaque, while the USA and Western Europe have a reputation for transparent property deals. However, countries like India are becoming more reliable in the global context. But China and Russia are still viewed with a lot of circumspection and suspicions.
4. Market Strength
Strength is determined by the real estate developer’s market value. China has a lead over India in this aspect due to consolidation. But, the mature economies of the USA and Europe are still very resilient. Yes, property prices shot up in New York and Miami, but the demand will grow.
The above analysis along with the comparison chart comes handy when it comes to deciding whether to invest and where to invest in real estate domain.