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{| class="wikitable"
{| class="wikitable"
|+Rank of the country nominal GDP in terms of average cost of real estate (2019)
|+Rank of the country nominal GDP in terms of average cost of real estate (2019)
!Rank
!Country
!Country
!Nominal GDP (in trillion)
!Nominal GDP (in trillion)
!Average cost of real estate
!Average cost of real estate
!Rank
!Country
!Country
!Nominal GDP (in trillion)
!Nominal GDP (in trillion)
!Average cost of real estate
!Average cost of real estate
|-
|-
|1
|[[United States]]
|[[United States]]
|22.2
|22.2
|2614.57
|2614.57
|11
|[[South Korea]]
|[[South Korea]]
|1.74
|1.74
|10567.23
|10567.23
|-
|-
|2
|[[China]]
|[[China]]
|15.47
|15.47
|6785.16
|6785.16
|12
|[[Russia]]
|[[Russia]]
|1.67
|1.67
|1286.92
|1286.92
|-
|-
|3
|[[Japan]]
|[[Japan]]
|5.50
|5.50
|8661.49
|8661.49
|13
|[[Spain]]
|[[Spain]]
|1.50
|1.50
|3179.96
|3179.96
|-
|-
|4
|[[Germany]]
|[[Germany]]
|4.16
|4.16
|5523.54
|5523.54
|14
|[[Australia]]
|[[Australia]]
|1.48
|1.48
|5231.45
|5231.45
|-
|-
|5
|[[India]]
|[[India]]
|3.26
|3.26
|1292.93
|1292.93
|15
|[[Mexico]]
|[[Mexico]]
|1.30
|1.30
|1369.56
|1369.56
|-
|-
|6
|[[United Kingdom]]
|[[United Kingdom]]
|2.93
|2.93
|5574.59
|5574.59
|16
|[[Indonesia]]
|[[Indonesia]]
|1.21
|1.21
|1650.05
|1650.05
|-
|-
|7
|[[France]]
|[[France]]
|2.88
|2.88
|7022.09
|7022.09
|17
|[[Netherlands]]
|[[Netherlands]]
|0.954
|0.954
|4460.62
|4460.62
|-
|-
|8
|[[Italy]]
|[[Italy]]
|2.09
|2.09
|3728.41
|3728.41
|18
|[[Turkey]]
|[[Turkey]]
|0.809
|0.809
|864.63
|864.63
|-
|-
|9
|[[Brazil]]
|[[Brazil]]
|2.06
|2.06
|1693.77
|1693.77
|19
|[[Saudi Arabia]]
|[[Saudi Arabia]]
|0.790
|0.790
|1026.27
|1026.27
|-
|-
|10
|[[Canada]]
|[[Canada]]
|1.83
|1.83
|4587.96
|4587.96
|20
|[[Switzerland]]
|[[Switzerland]]
|0.740
|0.740

Revision as of 17:37, 6 February 2020

Cities by cost of real estate

This article lists the average cost of real estate of the top 20 cities of the world.

People purchase real estates for residents, commercial and investment.

Factors that affect the cost of real estate that include, location of the real estate, the GDP of each country, the average annual income per household of each country, the happiness index and the brokerages.

Government policy is one of the factors that affect the cost of real estate. For example, the housing policy that introduced by the Hong Kong Government in June 2018 has lowered the average cost of real estate in Hong Kong.[1]

By capital city/major city of each country

The government set their headquarters, which obtains the major functions and activities, in the capital city.[2] The government controls the development of capital cities and the housing market is part of the development.[3] Not all newly built real estates are highly priced, for example, in China, the properties in the historical core of the central locations are more expensive than those lately developed.[3]

By GDP of each country

The cost of real estate is correlated to the changes of GDP. [4] When the price of real estate goes up, there will be positive effect on the GDP, as the value of real estates represents the wealth of people controlled in hand.[5] In 2018, the nominal world GDP was $84835.46 billion, it has grew up for 3.6% compared to 2017.[6] Since 2003, China has maintained its GDP growth rate at 10% per annum, the cost of real estate has the same growth as the GDP’s. The GDP’s growth rate was 13% in 2007, while the real estate growth rate was 17.74%. The real estate market has strong relationship to the GDP.[5] In Canada, the housing price has a growth rate of 8.761% in correlated to the GDP. The GDP’s growth rate and the housing price have a positive autocorrelation.[7] In the measurement of nominal GDP, the United States, China and Japan are the three largest economies worldwide. In 2019, the nominal GDP of the United States, China and Japan are $22.2 trillion, $15.47 trillion and $5.5 trillion respectively. They took up nearly half of the world’s nominal GDP in proportion.[6]

Rank of the country nominal GDP in terms of average cost of real estate (2019)
Rank Land Nominal GDP (in trillion) Average cost of real estate Rank Land Nominal GDP (in trillion) Average cost of real estate
1 Vereinigte Staaten 22.2 2614.57 11 Südkorea 1.74 10567.23
2 China 15.47 6785.16 12 Russland 1.67 1286.92
3 Japan 5.50 8661.49 13 Spanien 1.50 3179.96
4 Deutschland 4.16 5523.54 14 Australien 1.48 5231.45
5 Indien 3.26 1292.93 15 Mexiko 1.30 1369.56
6 Vereinigtes Königreich 2.93 5574.59 16 Indonesien 1.21 1650.05
7 Frankreich 2.88 7022.09 17 Niederlande 0.954 4460.62
8 Italien 2.09 3728.41 18 Türkei 0.809 864.63
9 Brasilien 2.06 1693.77 19 Saudi-Arabien 0.790 1026.27
10 Kanada 1.83 4587.96 20 Schweiz 0.740 11100.80

*All figures are in US dollars.

*All average cost of real estate are price per square meter based on the apartment in city centre.

*The table is sourced from number.com.

By the average annual income per household of each country

People have more intention to buy real estate when their annual income increase.[5] As long as the income increases, the demand of real estate increases. Thus, as the rise of demand, the price of  real estate goes up.[8] (John M., 2002) In 2009, 5.1 % of pension plans are invested in real estate as an alternative assets in the globe.[9] Different countries have various portion of pension funds that invested into the real estate. In 2009, the United States has 75% of funds, 60% for Canada, both Australia and New Zealand reach to 95% and as well as the Europe.[9]

By happiness index

People concern about the mental health issue. Happiness index is one of the figures to show people’s satisfaction in the city.[10] Factors that affect the happiness index include, the government actions, the community – prosocial behaviour and the digital information technology.[10] There is no direct evidence to show that happiness index is correlated to the costs of real estates.[11] People in the higher income countries are reported to higher happiness and life satisfaction.[11] Given the similar background and income level, people who own their home are happier than those who rent it.[11]

By brokerages

Brokers are empowered to sell their clients’ homes on behalf of their clients.[12] Brokers provide buyers information of various properties and the surrounded neighbourhood. This is the added value of brokers.[13] Brokers usually obtain their clients’ home at a higher prices, which may also lead to a higher costs to the real estates.[14] Buyers usually purchase the real estate at a higher price with brokers.[13] The higher the price it is, the higher potential of buyers purchasing the properties that listed by brokers than those sold directly by landlords.[13]

  1. ^ "Government announces six new initiatives on housing (with photo/video)". www.info.gov.hk. Retrieved 2020-02-05.
  2. ^ Coakley, Jerry. (1983). The city of capital : London's role as a financial centre. Harris, Laurence. Oxford, England: B. Blackwell. ISBN 0-631-12805-0. OCLC 10697015.
  3. ^ a b Hu, Xiuhong; Kaplan, David H. (2013-05-16). "THE EMERGENCE OF AFFLUENCE IN BEIJING: RESIDENTIAL SOCIAL STRATIFICATION IN CHINA'S CAPITAL CITY". Urban Geography. 22 (1): 54–77. doi:10.2747/0272-3638.22.1.54. ISSN 0272-3638.
  4. ^ Case, Bradford; Goetzmann, William N.; Rouwenhorst, K. Geert (1999). "Global Real Estate Markets: Cycles And Fundamentals". SSRN Electronic Journal. doi:10.2139/ssrn.157019. ISSN 1556-5068.
  5. ^ a b c Xu, Ting (2017-01-06). "The Relationship between Interest Rates, Income, GDP Growth and House Prices". Research in Economics and Management. 2 (1): 30. doi:10.22158/rem.v2n1p30. ISSN 2470-4393.
  6. ^ a b "GDP Ranked by Country 2020". worldpopulationreview.com. Retrieved 2020-02-06.{{cite web}}: CS1 maint: url-status (link)
  7. ^ Hossain, Belayet; Latif, Ehsan (2007-12-31). "Determinants of housing price volatility in Canada: a dynamic analysis". Applied Economics. 41 (27): 3521–3531. doi:10.1080/00036840701522861. ISSN 0003-6846.
  8. ^ John M., Q. (2002). Real Estate Prices and Economic Cycles. University of California, Berkeley.
  9. ^ a b Andonov, Aleksandar; Kok, Nils; Eichholtz, Piet (2018-12-28). "A Global Perspective on Pension Fund Investmentsin Real Estate". The Journal of Portfolio Management. 39 (6): 32–42. doi:10.3905/jpm.2013.39.6.032. ISSN 0095-4918.
  10. ^ a b Helliwell, J., Layard, R., & Sachs, J. (2019). World Happiness Report(pp. 12-33). United Nations Sustainable Development Solutions Network. Retrieved from https://s3.amazonaws.com/happiness-report/2019/WHR19.pdf
  11. ^ a b c Senik, C. (2014-03-01). "Wealth and happiness". Oxford Review of Economic Policy. 30 (1): 92–108. doi:10.1093/oxrep/gru004. ISSN 0266-903X.
  12. ^ Jud, G. Donald (1982-06-14). "Real Estate Brokers and the Market for Residential Housing". Real Estate Economics. 11 (1): 69–82. doi:10.1111/1540-6229.00280. ISSN 1080-8620.
  13. ^ a b c Zumpano, Leonard V.; Elder, Harold W.; Baryla, Edward A. (1996-09-01). "Buying a house and the decision to use a real estate broker". The Journal of Real Estate Finance and Economics. 13 (2): 169–181. doi:10.1007/BF00154054. ISSN 0895-5638.
  14. ^ Jud, G. Donald; Frew, James (1984-07-01). "Real Estate Brokers, Housing Prices, and the Demand for Housing". Urban Studies. 23 (1): 21–31. doi:10.1080/00420988620080031. ISSN 0042-0980.
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