The London market is definitely weird, as it's continuing to rise despite an economic downturn, a shrinking finance sector, and ongoing uncertainty about just about everything.
Anyway, the FT has a piece up today which shows just how dependent it is on foreign buyers...
This diagram isn't about super prime properties that sell for millions, but rather about all new developments across London. The real estate agency who put it together have a bias towards foreign investors, so it might be somewhat skewed.
There's more in the video embedded in the page, and a link in the comments to an article at a Singapore property website.
Note that the graph of London prices in the video is denominated in dollars. For a UK resident, who's being paid in pounds, they've barely moved down in the last few years. In some cases they're up from the "peak" in 2007.
Two things strike me.
The first is that locals are being priced out of the London market. Anecdotally, I know of a number of people on decent incomes (IT contractors, estate agents), who are unable to move out of a two bedroom apartment or house and into a bigger, family home. There seems to be an exodus into the commuter belt.
The second is that if the UK gets into trouble, the pound picks up strength, or there's a financial crisis in Southeast Asia then the situation could have a very sharp turnaround.
I don't know what the situation is like in Australia, but there was an article about a Bondi development in the SMH suggesting that cashed-up Asians, the same group who're buying up London, bought up a significant chunk of the apartments. I'd be interested in seeing figures. But if they are present in large numbers then it could constitute a risk, particularly to OTP developments, if the wind changes.
Anyway, the FT has a piece up today which shows just how dependent it is on foreign buyers...
This diagram isn't about super prime properties that sell for millions, but rather about all new developments across London. The real estate agency who put it together have a bias towards foreign investors, so it might be somewhat skewed.
There's more in the video embedded in the page, and a link in the comments to an article at a Singapore property website.
Note that the graph of London prices in the video is denominated in dollars. For a UK resident, who's being paid in pounds, they've barely moved down in the last few years. In some cases they're up from the "peak" in 2007.
Two things strike me.
The first is that locals are being priced out of the London market. Anecdotally, I know of a number of people on decent incomes (IT contractors, estate agents), who are unable to move out of a two bedroom apartment or house and into a bigger, family home. There seems to be an exodus into the commuter belt.
The second is that if the UK gets into trouble, the pound picks up strength, or there's a financial crisis in Southeast Asia then the situation could have a very sharp turnaround.
I don't know what the situation is like in Australia, but there was an article about a Bondi development in the SMH suggesting that cashed-up Asians, the same group who're buying up London, bought up a significant chunk of the apartments. I'd be interested in seeing figures. But if they are present in large numbers then it could constitute a risk, particularly to OTP developments, if the wind changes.