Adobe Stock/Jamie Hooper

According to an analysis by real-estate firm NeighborhoodX, a suburban-style, 2,000-square foot home on a 0.21 acre lot would cost around $61 million in Manhattan’s Chelsea neighborhood - $60 million for the land plus only $708,000 in estimated construction costs.

The same home could be built on 1.1 acres in San Francisco’s SoMa neighborhood or 0.68 acres on the Thames River in London for about $26 million. In both cases, construction costs still come to less than one million dollars of the total price. In Hong Kong, a 6,200-square-foot home is currently on the market for $448 million – and if the buyer tore down that home and built a 2,000 square foot home, it would still be worth about $447 million.

Constantine Valhouli, director of research for NeighborhoodX, attributes these outsize land prices to the assumption that buyers will build denser properties on the site, such as luxury apartments.

“It’s one thing to have a modest single-family house,” Valhouli says. “But it’s entirely another to have a single-family house on a site that could have been occupied by a skyscraper.”

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