London’s residential sales market continued to witness robust sales during 3Q 2013, as consumer confidence in September reached its highest level since November 2007, according to Global Property Consultants Chesterton Humberts.
Chesterton Humberts Prime London Residential Capital Values Index recorded a 2.3 percent rise in average values in 3Q, following a 3.4 percent increase in 2Q. Overall Prime Values have risen by 8.0 percent during the first nine months of the year.
According to Chesterton Humberts’ Autumn Report 2013, sales activity concentrated in sub-£2 mil bracket with many buyers unwilling to absorb the steep Stamp Duty Land Tax increase this level until asking price goes beyond the £2.2 to £2.25 million mark.
Buyers were looking to move away from the more expensive central locations to areas where they can buy a similar sized property for less money often with larger outdoor space which is a key consideration for families – particularly in South West London.
"New Homes market particularly those sold off-plan saw higher activity with 2 out of 3 buyers are foreigners,’ said Donald Han, Chesterton Singapore’s Managing Director.
“Singaporean and other South East Asian nationality investors account to almost half of investors from Asia. The remaining comes from China and Hong Kong,” he added.
Hot on the heels of strong Asian investors’ appetite for London properties, Asian developers have started aggressive property acquisition and residential land banking process.
Singaporean developers such as Oxley, City Developments, Hwa Hong Corporation and Ho Bee Land have recently acquired properties in London. Hong Kong’s Gaw Capital Group recently joined the foray acquiring a major London deal, despite news of probable capital gains tax.
"Developers have begun to approach us for land banking opportunities, more than say six months ago as many Asian markets have peaked and may undergo price correction due to impending supply and effective government cooling measures,” according to Han.
“Developers are diversifying, going regional and are looking at key global cities that offer compelling values, with a larger market audience. London has the checks on all the boxes. Asian developers can bring their London projects back to their home country to market or they can chose to target on a global captive audience – which is a bigger lure than concentrating on their native home soil market,” he added.
Chesterton Humberts reports opined that the Government will try to prevent any further shocks to the market in the run-up to the General Election in May 2015.
"We therefore expect the prime market to remain buoyant in 2014 with sustained buyer demand,” added Han.
Andrew
Batt, International Group Editor of PropertyGuru Group, wrote this
story. To contact him about this or other stories email andrew@propertyguru.com.sg
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