A report by global real estate consultant, Savills, has found that Hong Kong has the world’s most expensive luxury property market.

The Chinese city of 7 million boasted prices of $10,316 per square foot for its luxury homes. According to Savills, the high prices are fueled by market demand for “trophy homes” especially from mainland Chinese investors.

The population density in Hong Kong is 16,576 people per square mile, so the packed city has a limited supply of luxury property and that drives the price up even further.

“Many more of the world’s billionaires are being created in China, rather than in New York or London, and it is shifting the buying patterns,” Yolanda Barnes, director of residential research at Savills, told the Financial Times.

“There are so many barriers for China’s billionaires getting into Europe of the US, whereas it is relatively easy for them to repatriate wealth out of mainland China and into Hong Kong. The result is that ultra-prime property prices in Hong Kong have exploded,” she continued.

The Savills report profiled 10 “world class” cities: Hong Kong, London, Moscow, Mumbai. New York, Paris, Singapore, Shanghai, Sydney and Tokyo. Tokyo had the second highest price per square foot on the list at $7,991 while luxury property in Paris came in third at $5,035 per square foot.

Although Hong Kong nabbed the top spot in price per square foot, Tokyo’s luxury homes were the most expensive in total value since they are often bigger, at an average of 16,000 square feet.

Savills also noted that the cost of luxury property is rising fastest in “emerging new world economies.” Prices in Singapore grew 144 per cent since 2005, in Mumbai by 138 per cent and in Moscow by 110 per cent. Hong Kong grew by 83 per cent since 2005.

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