The three cities that saw the biggest spikes in luxury real estate prices last year had one thing in common: They were all located in China.
According to The Wealth Report, an annual publication by the Knight Frank real estate firm, Shanghai experienced the biggest annual price increase for prime residential real estate. The London-based firm defines prime real estate as the top segment of each market.
Prices for prime properties in Shanghai jumped 27.4 percent in 2016, solidifying its position as one of the most expensive cities in the world.
Beijing saw the second-biggest increase, with price growth of 26.8 percent.
It was followed by Guangzhou, which experienced a 26.6 percent gain. Still, even with that increase, prices in the Chinese city remain half of what they are in Shanghai.
Seoul, South Korea, and Auckland, New Zealand, rounded out the top five, with prices rising roughly 16 percent.
China's real estate market has strengthened over the past year due to the growing economy, increased demand for housing and a fairly low supply. What's more, a crackdown on moving money offshore is driving more money into domestic real estate.
On the flip side, many of the traditional cities favored by the wealthy suffered from currency shifts or new taxes. Last year's top-ranked city for price growth, Vancouver, fell to seventh place after British Columbia passed a 15 percent tax on foreign buyers.
Prime prices in London fell 6.3 percent, as a hike in the stamp duty for nonprimary homes — not the U.K.'s decision to exit the European Union — put a damper on sales. New York City prices increased 3.5 percent, as the stronger dollar and growing supply for luxury condos kept the market in check.
Yet when it comes to the most expensive luxury real estate market in the world, Monaco still reigns. Knight Frank measured how much luxury real estate $1 million buys around the world, and in Monaco, it shakes out to just 182 square feet of prime space.
Hong Kong was the second most expensive city, with $1 million equating to just 215 square feet. In third-ranked New York City, $1 million buys you 280 square feet of prime space. (The average price per square foot for all real estate in New York was $1,760 in the fourth quarter.)
If you're looking for luxury bargains, head to Cape Town. There, $1 million will get you 2,200 square feet.