For years, prime central London has been a popular location for Asian property investors. However, The Wall Street Journal recently reported that the outlook for the market in 2016 does not look rosy. Some experts are even predicting that prime real estate there may see little to no growth in the next few years.
According to Savills, prime London prices will have fallen by two percent before the year ends. Lucian Cook, Director of Savills Residential Research, explained that the prime London market appeared to be overvalued. The consultancy predicts there will be zero growth in prime central London next year, followed by a two percent increase in 2017. Things should pick up by 2018 when five percent growth is expected.
Residential properties priced above £5 million have been affected the most this year. Property firm LonRes noted that demand fell a little less than 60 percent in the third quarter of 2015 compared to the second quarter. The Wall Street Journal also stated that this segment of the market could end up with an oversupply of unsold homes.
“Stock is building up as we speak, and there is a conspicuous oversupply of properties for sale – some of which are thoroughly over-priced,” said Trevor Abrahamsohn, owner of Glentree International estate agents.
Agents also believe that international buyers will come back into the market but not necessarily to look for properties above £5 million. In addition, experts believe that billionaires from India could end up buying prime London property, while the strengthened dollar gives US buyers a better value in the UK than in previous years.
“At the sub-£5 million level, expect Chinese buyers to flock to London due to recently reduced constraints on gaining UK visas for purchasing properties,” said Giles Hannah, Senior Vice President at Christie’s International Real Estate.
This article was first published on DDproperty.com, Thailand’s leading property site.