London may be the world’s financial capital and Tokyo its biggest city, but Sydney is the location of choice when it comes to residential property investment.

This is at least in the eyes of cashed up residential property buyers from Hong Kong, who indicate Sydney as their destination of choice for property investment.

International real estate group Knight Frank’s Global Development Review 2013  indicates that not only is the Harbour City Hong Kong investors’ top pick, but it is also the third favourite international city for Indonesian property investors to park their money.

Knight Frank global head of residential research Liam Bailey said that while the flow of wealth into residential property is expected to increase, buyers’ expectations are also rising.

“Developers are increasingly bringing more high-specification ‘trophy’ buildings to market. The importance of partnering with a renowned architect and designer, a good location and the appeal of serviced apartments should not be overlooked. This ‘flight to quality’ is evident in nearly all prime markets as buyers recognise the importance of getting the best properties in the best locations.”

On a global scale, Chinese buyers are dominant in the residential development sector and are the most active foreign buyers in the Sydney and Hong Kong markets.

“Chinese buyers’ global presence is fuelled in part by a strong yuan and slowing domestic economy, both of which are encouraging Chinese investors to look further afield in an attempt to diversify their investments,” the report says.

“Singaporean and Russian investors are the next most active buyers of new-build residential property around the world.”