Which city has the most bubble-tastic luxury property market?

Joining the glamorous ranks of cities you can no longer afford to live in. Image: ROMEO GACAD/AFP/Getty.

Prime property – expensive flats in prestigious bits of cities – is all the rage. Not as somewhere to live, you understand (do me a favour), but as an asset class. Posh flats are an increasingly popular place for the rich to stash their money.

But which city, we hear you cry, has the fastest growing prime property prices? Where, CityMetric’s well-heeled readers demand to know, should we put our money?

One might think, from all the talk of rich Russian oligarchs buying up chunks of Mayfair, that the answer would be London. One would be wrong. According to Knight Frank, in the year to June, prime property prices in London rose by a measly 8.1 per cent: in the ranking of 32 cities accompanying the research, the British capital barely scraped the top 10.

You’d be much better investing your riches in New York, which ranked 3rd, with prices up by 18.4 per cent. Even better would be Dublin, which ranked 2nd, after prices rose by 23.5 per cent in a year. (Investing money in the Dublin housing market has always been a good idea in the past.)

Topping the charts, though, is Jakarta, pictured above. The Indonesian capital may not spring to mind as a luxury destination. In the last year, though, the cost of its prime property – that is, the top 5 per cent of its real estate market – has risen by 27.3 per cent. Here’s the full ranking.

So what’s driving this vertiginous climb? Liam Bailey, Knight Frank’s head of residential research, identifies the usual culprits: “very strong demand” and “limited supply”. This is fantastic for investors who own Jakarta apartments, but it’s not so great for the locals.

So unsurprisingly the authorities have been attempting to slow things down. In September 2013, Bank Indonesia passed a regulation reducing the maximum loan-to-value ratios on investment properties. That required buyers to pay deposits of at least 40 per cent on second properties, and 50 per cent on any beyond that.

Such measures have been known to work. Singapore has been gradually reducing loan-to-value ratios to cool its own property market for the last five years. In 2013, it also introduced an additional 15 per cent stamp duty for foreign buyers who already own homes.

As a result, the luxury market – many of whose occupants are covered by these criteria – hasn’t seen significant growth since mid-2010. This year, prices fell by 7.7 per cent, placing it at the very bottom of Knight Frank’s ranking.

Here’s a chart comparing prime property prices in Singapore with those in other major Asian cities:

So, it is possible to calm a property market down – but you have to really want to do it. Beijing introduced its own cooling measures in 2013 – but they were swiftly rolled back again, after prices fell rather quicker than the central government had hoped. The US-based National Interest magazine accused the city of having a “housing addiction”.

As ever, there’s a tension between the need to stop the market from turning into a bubble – and the benefits high property prices can offer to their powerful owners.

 
 
 
 

Vanilla Skybus: George Romero and Pittsburgh’s metro to nowhere

A prototype Skybus on display near Pittsburgh. Image: BongWarrior/Wikimedia Commons.

The late director George A Romero’s films are mainly known for their zombies, an association stretching from his first film, 1968’s Night of the Living Dead, to his last as director, 2009’s Survival of the Dead.

But many of them are also a record of Pittsburgh, the city he lived and worked in, and other locations in the state of Pennsylvania in the late 20th century. Martin (1978), for example, isn’t just a movie about a kid who thinks he’s a vampire: it’s a moving portrayal of the post-industrial decay of the Pittsburgh borough of Braddock.

Though born in New York, Romero studied in Pittsburgh and stayed in the city after graduation, shooting commercials as part of the successful Latent Image agency. It was in collaboration with advertising colleagues that he shot his debut Night of the Living Dead. On both that movie and subsequent films, Romero and his colleagues used their experience and connections from the agency to secure cheap and striking locations around the city and state. 

It’s in Romero’s little-seen second film, 1971’s romantic drama There’s Always Vanilla, that a crucial scene touches on a dead end in the history of urban transport in Steel City.

In the scene Vietnam vet Chris, only recently returned to town after a failed music career, sees his father off on a train platform, after an evening where Chris got his dad stoned and set him up with a stripper. (It was the early 1970s, remember.) An odd little two-carriage metro train pulls up on an elevated concrete platform, Chris’ father rides away on it, and then Chris literally bumps into Lynn, whom he then both gaslights and negs. (It was the ‘70s.) You can see the scene here.

A screenshot from There's Always Vanilla, showing the Skybus through a chain link fence.

If you don’t live in Pittsburgh, you might assume that funny little train, still futuristic forty years on, is just an everyday way of getting around in the exciting New World. Who knows what amazing technology they have over there, right?

In fact, the Transit Expressway Revenue Line, more snappily referred to as the Skybus, not only doesn’t exist today: it hardly existed at all, beyond what we see in that short scene. In the 1960s there were plans to replace Pittsburgh’s street car system with a more up to date urban transit system. The Skybus – driverless, running on rubber tires on an elevated concrete track with power provided with an under rail system – drew enough support from the Port Authority and Federal Government for them to fund a short demonstration track at the Allegheny County Fair, at that point a local institution.

It’s this demonstration track and train that appears in There’s Always Vanilla. Film makers love isolated systems like this, or the UK’s many heritage railways, because they allow for multiple takes and a controlled environment. So it made sense for Romero to use this local curio rather than seek access to an in-use station.


The sequence in Vanilla shows that the Skybus system worked, and as a potential metro system it looks quite striking to this day with its curved windows and distinctive logo. But the proposed system wasn’t popular with everyone, and cost concerns and political wrangling stalled the project – until it was finally rejected in favour of a more conventional steel wheel on steel rail transit system.

The demonstration track was pulled up in 1980, although the small station and platform seen in the movie remains: Romero expert Lawrence Devincentz narrates a photo tour of the building on the blu ray of There’s Always Vanilla.

Vanilla was renamed and barely seen on release, but is now available as part of a boxset of Romero’s early works from Arrow Video, in ridiculously pristine 2K digital transfer. The Skybus is there too, a curio of Pittsburgh history caught on a few short minutes of film. Neglected back then, both seem considerably more interesting now.

‘There’s Always Vanilla’ is available on blu ray as part of Arrow’s ‘George A. Romero: Between Night and Dawn’ box set, and will receive a standalone release later this year.

Mark Clapham used to work in rail regulation, but now writes things like this. He tweets as @markclapham.