|
Archived Articles
Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.
He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.
In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.
Global Real Estate Project
|
 |
New York, London and Paris are millionaire-friendlyWithin western developed countries there is striking disparity between different cities in terms of real estate prices. Nations with parity in incomes may pay several times more or less for housing. Business executives may also find similar striking differences when they decide to rent office spaces. We find another striking difference among countries with similar or even equal purchasing power parity when we look at the market of top retail spaces. Here differences are really huge. Three cities, New York, London and Paris stand far above remaining sister-cities in Americas and Europe. But retail market doesn't exist and operate against the rules of market economy. There is a reason why we have these results. My argument is that retail space rentals may be used as good indicator measuring volume and affluence of local financial elites. There is certain paradox between huge difference in retail rentals in most developed countries, on the one hand, and upper class mobility, on the other. My assumption is that retail rents are calculated toward the final price clients are paying. Rational choice economic theory says people will tend to prefer cheaper goods everything else being equal. "Everything else" in this case means that nobody will drive 100 miles more in order to make full for only 2 cents discount. But the two nearest gas stations are within the same range, customer will choose cheaper one. Common sense sees direct link between high retail rentals and affluent customers. Common sense however doesn't make explicit correlation between amount of money spent and its origin. People buying from 5th Avenue in NYC or Champs Elysees in Paris may come from all over the world. Some indeed do exactly this. City authorities are far from neutral when it comes to guess where all these millionaires are coming from. It's so funny to see how similar their explanations are, funny, because it seems they haven't coordinated their statements. For them millionaires are "imported"; they actually do lots of good things, e.g. they go to top shopping streets and buy. They move trade up and create jobs. In general, they are more than welcome. It still remains secret why all these millionaires, so desperate to spend money, don't just look closer to home. Russian elite, so highly concentrated in Moscow, may find all the same high quality stuff on Tverskaya instead of going to London or Paris. Urban legends about "new Russians" going to buy abroad because they are looking to buy more expensive stuff may have been true for early 1990s, but they seem very unlike in 2005. The only remaining both rational and plausible explanation is that most people spending on 5th Avenue and on Champs Elysees are actually living in very close proximity. This explanation is partially supported by the fact that cities with highest retail rentals are usually cities with highest residential rentals and sales, and also cities with highest office rentals. Other plausible, but very irrational, explanation would be that for some reason all millionaires from New York are going shopping to London and Paris preferring Europe over America, and all millionaires from London and Paris are going shopping to New York preferring America over Europe. Until we find substantial proof in this phenomenon that would destroy the very basis of rational thinking, we'll hold that it's local financial elite that counts for the bulk of top retails transactions and thus making retail rentals go up and down. In fact, it's an excellent measure for counting purchasing power of this elite, because the same power determines outcomes on residential and commercial real estate market, two markets that are somehow related to general economic activity in each country.
Top 20 locations in Americas and Europe --------------------
See also the directory of companies providing real estate services in, and general real estate information of New York City, London and Paris.
|
