The Purchasing Power of $1 Million in the World’s Most Expensive Real Estate Markets
In the world of real estate, a million dollars may seem like a hefty sum. However, in the most expensive markets around the globe, that kind of money won’t get you very far. According to the 2024 Knight Frank Wealth Report, $1 million would only be enough to buy a mere 16 square meters of prime property in Monaco, the luxurious country nestled on the Mediterranean coast.
To put this into perspective, a typical studio apartment or smaller one-bedroom unit is around 500 square feet, which translates to approximately 46 square meters. So, in essence, $1 million would only afford you a fraction of a typical apartment in Monaco.
The real estate market in Monaco has experienced significant growth over the past decade. The number of resale properties sold with prices above 10 million euros (around $10.8 million) has increased by more than 300%. In the past year alone, more than 50% of properties sold in Monaco were priced above that threshold.
Hong Kong and Singapore, two other expensive real estate markets, also showcase the limited purchasing power of $1 million. In Hong Kong, this amount would only buy you 22 square meters of prime property, while in Singapore, it would get you 32 square meters. The median price of a home in Hong Kong was $1.16 million in 2023, and in Singapore, it stood at $1.2 million.
However, it’s important to note that Singapore offers government-subsidized housing options with much more affordable prices. The median price for such housing is $409,000, making it a more viable option for buyers with a limited budget.
On the other hand, New York and Los Angeles, two of the most expensive real estate markets in the United States, provide more value for $1 million. In these cities, one could purchase 34 and 38 square meters of prime property, respectively.
The Knight Frank Wealth Report highlights the significant variation in prime prices across luxury residential markets, which often surprises potential buyers. For example, prime prices in Dubai are 134% higher than before the pandemic, but they remain lower than in more established markets. In Dubai, $1 million can buy 91 square meters, four times the equivalent in Hong Kong.
However, it’s important to remember that these figures may not be a challenge for the world’s wealthiest individuals. The top 1% in the United States, for instance, has a net worth of approximately $5.8 million or more.
Ultimately, the purchasing power of $1 million in the world’s most expensive real estate markets is relatively limited. While it may be enough to buy a decent property in some cities, in others, it’s merely a fraction of what’s needed to enter the luxury market. As the real estate landscape continues to evolve, it’s crucial for buyers to consider their options carefully and navigate the market wisely.
