By Kingsley Adegboye,with Agency report
A new report by UN-Habitat and the Chinese Academy of Social Sciences has found that property prices in cities have a strong influence on city competitiveness.
The major indicator of the report, competitiveness, shows how well a city is doing in relation to others, by measuring a basket of indicators in cities. These indicators are technological innovation, cultural diversity, economic dynamics, government management, global connections, environmental quality, and social cohesion.
The report found that there was a positive relationship between house prices and the economic competitiveness index meaning that increase in real estate prices and competitiveness go hand in hand.
However, at a certain point, rising house prices have a negative effect on competitiveness when prices and the cost of living become too high and gentrification becomes a negative force.
The report, “The Global Urban Competitiveness Report 2018: House Prices, Changing the City World”, which looks at the relationship between house prices and urban competitiveness also found that when the house prices are within a reasonable range, they promote urban economic development, scientific and technological innovation and industrial upgrading, thus improving urban competitiveness.
When house prices increase, renewal and diversity come into place making the city more attractive, and bringing in talent and investment, creating a virtuous circle.
The report examines in depth the relationship between real estate prices and the transformational upgrading in 11 case studies that include cities in the Silicon Valley area of California , Guangdong, Madrid and Lima.
The urban competitiveness of 1,038 cities was examined during the study on a global scale. Urban competitiveness refers to a city’s ability to attract and transform resources, control and expand markets, and at the same time creating more wealth and providing welfare for its citizens.
The report, not surprisingly, lists the cities in high-income countries as most competitive, but also records a strong progress by Chinese cities entering the list of the 20 most competitive cities.
Among the top 100 cities in economic competitiveness, 39 cities are in North America, 32 are from Asia, 26 are from Europe, 3 are from Oceania with no cities from Africa and South America.
Most cities are from the United States (36), China (21 ), Germany (seven), Canada (five), and Australia (three), and the UK, Japan, Switzerland, the United Arab Emirates, Spain and India each has two cities.
The top 10 global cities in terms of sustainable competitiveness in 2017 are: New York, Los Angeles, Singapore, London, San Francisco, Shenzhen, Tokyo, San Jose, Munich and Dallas.
The report found that they had the following advantages ; New York – high level financial services; Los Angeles – business cost advantage and multi centre logistics hubs; Singapore – good
livelihoods and standard of living with balanced development; San Francisco – city by the Bay suitable for both commerce and living; Shenzhen – global level scientific and technological innovation; Tokyo – industrially integrated and comfortable lifestyle; San Jose – scientific and technological city with efficient business environment; Munich – fully fledged industry and liveable ecological environment; and Dallas – high-level financial service and cutting-edge scientific innovation and technology.