Most expensive cities in world to buy property: Sydney cost per sqm rivals top global hubs

Huge price rises have put Sydney into an unusual category of global city, with a ranking of the most expensive places to buy property revealing how our prices compare to the rest of the world.

Runaway growth in home prices has turned Sydney into the seventh most expensive city to live in the world.

With property costing an average of $26,500 per sqm, homes in the Harbour City were pricier than in a range of higher density cities, according to a report by global real estate group Savills.

Cheaper cities included South Korean capital Seoul, San Francisco, Singapore, Beijing, Los Angeles and Moscow, among others.

The only cities where buyers paid a higher average price per sqm were Hong Kong, New York, Tokyo, Shanghai, Geneva and London.

Hong Kong remains the priciest property market in the world.

Shanghai had the fastest growing prices of the cities studied and was the fourth most expensive. Picture: iStock

Many of the forces driving up Sydney prices were evident across most of the world’s biggest financial centres, Savills noted.

This included record low interest rates, increased property spending and economic stimulus measures from governments.

There has also been a global trend of buyers seeking out bigger homes after being holed up indoors due to lengthy lockdowns to combat the spread of Covid-19.

Demand for bigger homes was further aided by increased work from home arrangements in the 30 cities studied in Savills’ Global Cities Index.

It was evident Sydney prices punched above their weight considering the city’s standing on the world stage.

A report by Demographia released earlier this year placed Sydney prices as the third least affordable when factoring in average incomes.

A typical house costs roughly 12 times the average annual income of residents – the only cities where this ratio was worse were Hong Kong and Vancouver.

Both cities have land supply issues – Hong Kong is an island and Vancouver is on a peninsula surrounded by mountains and national parks.

Sold for over $35m: This mansion in Vaucluse sold during Sydney’s latest lockdown.

Sold for $25m: This Olala Ave home was another Vaucluse property sold during lockdown.

Land supply was also an issue for Sydney, but a Housing Industry Association report revealed this was the result of state government failing to green light new blocks fast enough to meet demand.

HIA economist Angela Lillicrap said government further failed to account for the additional demand created by the introduction of the HomeBuilder grant last year.

“Demand increased without any increase in supply,” she said.

There has also been a crippling shortage of established houses up for sale in Sydney – especially during the recent lockdown due to a mass of sellers withdrawing their homes from the market.

This Bellevue Hill house sold for $31m just before lockdown.

My Housing Market economist Andrew Wilson said buyers activity remained elevated during lockdown. This, coupled with the fewer homes for sale, was increasing competition for housing, he said.

Multiple houses have sold for over $20 million during lockdown, including a Vaucluse mansion on Hillside Ave for over $35 million. A Bellevue Hill mansion sold for $31 million just before lockdown.