The newly minted super-rich are propping up the prestige property market – and this time their motives aren’t just financial
By Robin Bowman
In 15 years of selling in London, estate agent Ben Morris has never been so busy. Sales of super-luxury property in London are booming, fuelled largely by ultra-wealthy foreigners. “Typically I’ll get a call from a buyer who says they’ll be passing through London for 48 hours and they want to see some properties,” says Morris. “I’ve even known people actually buy a multimillion-pound property in that time.” Last year foreign investors pumped £3.3bn into luxury London dwellings. They now make up 27% of buyers, and own some 40% of the city’s prime real estate. These buyers, mainly from BRIC countries, are increasingly eager, it seems, to grab a trophy property. Morris works for Savills in London’s upmarket Knightsbridge. “2011 has been phenomenal. We’re selling lots of properties in excess of £10m (€11.5m),” he says. “Business has come right back following the financial crisis. We’re seeing buyers from Russia, India, Eastern Europe and China – in that order.” In the three months to mid-September, luxury property consultants Barnes reported a 60% rise in foreign enquiries in London.
The UK capital is exceptional for the proportion of foreign buyers it attracts, but two other cities – Paris and New York – also stand out. In the Big Apple, some agents report prices at or near their peak of the second quarter of 2008. In just one week this summer three residences, all priced over $25m, came to market in Manhattan – the most expensive being an 18-room, five-bed apartment for $29m at 640 Park Avenue.
Jonathan J Miller of New York agents Miller Samuel says the proportion of foreign buyers has certainly increased, particularly as the dollar has declined. Over the company’s 25-year history, such investors have accounted for an average of 15% of sales. That has risen to 25% this year. “The activity is originating largely from Europe and Asia but there’s a growing interest from South America, especially from Brazil,” he says. “Russian investment tends to be at the very high end of the market in trophy properties – and Indian investment seems to be gaining. Chinese investment has also shown gains.” Read more...
