Sunday, September 7, 2014
London property remains hot with Asians
But although prices
continue to rise, there does not appear to be a bubble forming.
Average prices in prime
Central London have risen 10.09% over the past four quarters to about GBP1.64
million ($3.4 million), property consultancy London Central Portfolio (LCP)
said last week.
Long-term growth has
averaged 10.5% a year since January 1996.
LCP noted that prime Central London transactions are at their highest level
since 2007. There have been 6,546 transactions over the past four quarters, up
19.34% year-on-year.
Prices in Greater London
are also on the rise, posting an annual growth rate of 8.53%, which brings
average values to about GBP530,000.
Transactions here for London properties are at
their highest level since 2007 as well, with 116,551 sales over the past four
quarters, up 28% year-on-year.
"People buying now
can see the benefit of slightly fringe locations, looking at them for the
longer-term prospects,"said Mr Liam Bailey, global head of residential
research at Knight Frank.
He added that while it has
been a well-established trend for foreigners to buy in London , new buildings in recent years have
seen especially strong take-up among Asian investors.
"It's almost like a
commodity that people buy and sell... investors here like London as it's a
tested and proven market," said Ms Doris Tan, head of international
residential properties at JLL.
The prject is part of
Principal Place, a mixed-use development that will feature a 15-storey
commercial building and retail outlets as well as a piazza that could become a
neighbourhood centre, said W1 Developments.
It is being jointly
developed by W1 Developments, Brookfield Office Properties and Concord Pacific.
As at Friday, more than 30
units had already been sold through pre-sales.
"It's unusual to have
an exclusively residential high-rise building at such a prime address,"
said W1 Developments managing director Christopher Murray.
The Landau, a 89-unit
luxury building in Fulham, London ,
was also exhibiting yesterday, at the Regent Singapore hotel. Prices start at
GBP915,000 for a one-bedroom apartment.
Overall, the pound
sterling is likely to remain stable in the short to medium term, and should not
strengthen significantly against other currencies during the remainder of teh
year, noted Mr Bailey.
"As the major issue
in Britain
is deflation rather than inflation, the bank is unlikely to raise rates."
Source: ST
Much has been said and
written about the current state of the London
property market and more importantly, whether a bubble is forming (if not
already). While many have acknowledged that the bull is running a tad slower
these days - prices have fallen for the past 2 consecutive months - home prices
in London are
currently still hovering at its peak. If long-term price growth for Central London has averaged 10.5% a year since 1996,
current prices are already more than 6 times what it was 18 years ago (if our maths are
correct)!
So with transactions for
both Central and Greater London being at their highest levels since 2007, the much bigger investment quantum needed given that prices are at their peaks and properties being labelled as "a commodity that
people buy and sell", the underlying risk has definitely become greater
when come to investing in a London
home.
Having said that, there is
always money to be made in any kind of market. Key to this is always the "right"
timing of entry and more importantly, exit. While the wife and I do not think
that the London
property market will crash anytime soon, we do believe that a bubble is forming slowly but surely. Going forward, it will be
increasingly challenging to make money out of this market.
This is mainly the reason why we have decided to exit the London market... but not discounting the UK altogether... yet.
0 comments:
Post a Comment