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London’s boom bust boom real Chinacation

London’s boom bust boom real Chinacation

Chinese property buyers both from the Mainland and across Asia have become key players in London’s property play. Though the story is now shifting away from the tragicomedy of the Brexit and now into what’s next territory?

While the U.K. has been for the most part a sterling investment for many foreign real estate buyers, the motivation for the Chinese market goes well beyond the stabilized rental yields, ease of obtaining bank financing and favorable foreign ownership.  Education is also a leading driver of demand for purchasing a property with the aim of sending children overseas for schooling either now or in the future.

I was reading a piece in the South China Morning Post over the weekend that had surveyed sentiment amongst Chinese on the post-Brexit London real estate environment, and the positive mood was overwhelming. That said a large number of respondents were looking to offload properties in the secondary market so perhaps the shifting sands is now into sell mode.

Taking to other Asian’s around the region, there is an increasing appetite for them to now go into London and buy, given lower market valuations and currency appreciation against the pound.  What is being created is a perfect storm of willing buyers and willing selling or in essence a “win win.” For those in Asia the reality in their own home sectors is pricing how now been pushed to the ceiling, so they are looking further aboard.

While this is all well and good for investors, the situation in London is not all blue sky. There is mounting concern over the displacement of local residents, empty apartments and a lack of community.  Though London property has become a land bank, the reality of banks is they remain sterile and lifeless areas for the trading of commodities.

The jury remains out on Brexit but the impending doom some predicated has been offset by a new real estate cycle in the secondary property sector.

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Bill Barnett has over 30 years of experience in the Asian hospitality and property markets. He is considered to be a leading authority on real estate trends across Asia, and has sat at almost every seat around the hospitality and real estate table. Bill promotes industry insight through regular conference speaking engagements at key events and spends substantial time with his feet on the ground on research projects and gathering market intelligence. Over the past few years he has released four books on Asian property topics.

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