Concerns about the British economy and the Brexit situation are making property investors cautious.
Despite the weakening pound, property investors in Singapore are taking more time in making a decision to buy a UK property compared to their counterparts in other Asian countries, reported Channel NewsAsia.
“Singaporeans are generally cautious investors and while we have seen a renewed interest in London properties, investors are not jumping in,” said Vanessa Chan, Associate Director of International Residential Property Services at JLL Singapore.
In agreement, Elliot Vure, Sales Manager for Asia at Manchester-based Select Property, noted that Singaporeans tend to take a “more conservative approach and like to analyse things for a bit longer”.
Aside from the uncertainty surrounding the British economy, some investors opt to wait and see in the event property prices fall further due to the looming prospect of a “hard Brexit”, said Phylicia Ang, International Residential Sales Head at Savills.
Others are concerned about the weaker pound, which has fallen almost 20 percent against the Singapore dollar year to date. Although a slump in the sterling means bigger buying power for Singaporeans, the cheaper currency also reduces the value of sterling-denominated assets as well as potential income returns.
London-based property firm Strawberry Star saw sales of British properties to Singapore buyers plunge around 80 percent year-on-year, said Regional Director Doris Tan. She noted that Brexit should not be viewed as the sole catalyst for the lukewarm response from local property investors.
“The response has been slower than past years and this could be due to investors buying into (the) UK having somehow overbought during the past few years,” said Tan.
Select Property, on the other hand, saw about 40 investors attending its Affinity Living Riverview project launch. The Manchester-based property developer has sold 14 units to Singapore buyers so far this year, compared with 16 for the whole of 2015.
Meanwhile, JLL revealed that the launches for its projects in London City Island and Slough, west of central London, attracted 35 and 40 attendees respectively. Its UK launches usually see around 40 attendees on average.
“They are taking more time to make buying decisions, but are still keen to identify good value in this market, and are looking for value and long-term growth in the current low yield environment,” said Chan.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
