Wealthy Chinese property buyers attracted to London
February 11, 2011 - London
Favourable exchange rates are encouraging Chinese buyers to purchase in London as it effectively means a discount of 20% because of the weakness of Sterling, according to real estate professionals.
One in ten sales at overseas exhibitions will be to Chinese investors in 2011 and there are a potentially large number of millionaires looking to buy in the UK's capital city, property consultants CB Richard Ellis believes.
While investments still traditionally flow through London based estate agents, the growth of residential development showcases in locations such as Hong Kong, Singapore and Kuala Lumpur resulted in the sale of at least £800 million worth of property last year, the equivalent of around 2,500 units.
In 2011, around 5 to 10% of all London house sales at overseas showcases will be to Chinese buyers and about 25% of those buying at exhibitions will be looking for somewhere to use themselves.
While traditional ‘trophy' buyers will continue to focus their attention on prestigious homes in prime central London, an increasing number of Chinese investors are diversifying their interests to include easy to manage new build apartments in regeneration areas like the Olympic zone where transport improvements are imminent, according to Jennet Siebrits, head of residential research at CB Richard Ellis.
‘The strength of Chinese investors offers a complete contrast to the state of the UK and there is currently little home grown competition.
Chinese buyers helped drive property prices in the super prime markets last year, but 2011 might be the year when the rest of the London market catches up as appetite grows for good quality accommodation in well connected locations,' said Siebrits.
‘It is worth noting that around 25% of those buying at residential exhibitions are looking for somewhere to use themselves. Buyers who are not millionaires or real estate professionals are now looking to buy in London, predominantly with their children in mind for study or work,' she explained.
‘Cooling measures introduced by the Chinese government to curtail the country's domestic property bubble are likely to promote further overseas investment in cities like London.
The government has already introduced a tax on property purchases in some of China's major cities, which is encouraging potential purchasers to look elsewhere,' she added.
This article has been republished from Propertywire
Photo: Ocean Villas Group
Trends, property prices, property market, real estate market, Chinese investors, CB Richard Ellis