From the election of Donald Trump to Britain’s hung parliament, the worldwide economy and political situation are constantly bombarded by change and uncertainty. Fortunately, property industry experts have quickly learned to “expect the unexpected,” proving themselves resilient and adaptable. Meanwhile, the London property market has maintained its reputation for reliable investment, and luxury developments continue to appeal to the right market, whether in London, Abu Dhabi, Hong Kong or Singapore.
Hong Kong nationals make up the largest proportion of overseas investors in London
Hong Kong investors continue to feel very confident and comfortable in investing in the UK, and are showing a preference for the London property market over those in other capital cities. A recent report from the University of York shows that Hong Kong nationals make up the biggest proportion of overseas investors in London. At the same time, the introduction of new stamp duty measures in Hong Kong has discouraged investors from buying property locally.
We are very excited to be launching the Verto development in Reading, located to the west of London. We have already received many expressions of interest and requests to attend. Reading is one of the most affluent areas of the UK and we are expecting the majority of these luxury units to sell off-plan. Developments in London’s public transport project, Crossrail, has put Reading firmly on the map, and we are proud to be promoting a development that perfectly suits the Hong Kong investor appetite.
Lower prices in Singapore’s core central region lead to an increase in sales
Singapore’s luxury property market, particularly residential properties in the Core Central Region (CCR) which consist of districts 1, 2, 3,4, 9, 10 and 11 in the prime and exclusive areas of Central Business District, Orchard, Cairnhill, Tanglin, River Valley, Newton and Bukit Timah are usually the highest priced and most sought-after by investors.
However, over the last five years, with the introduction of the 15% Additional Buyer’s Stamp Duty (ABSD) for foreigners, there was a fall in demand for properties in the CCR. This decline, coupled with incentives and discounts offered by developers to hasten sales have inadvertently brought the prices of high-end properties in this region down by more than 20% over the last 3 years.
Due to this price correction, Singapore high-end properties are now even more attractive to investors looking to invest in the region. Based on research, the residential median price to income ratio in Singapore (for properties in CCR region) has fallen from 7.3 times in 2010 to 5.6 times in 2015, making Singapore property some of the best value in the world.
In addition, many investors are looking to invest in Singapore due to the country’s stable environment and long term returns on investment.
In 2016, the Core Central Region saw the highest increase in number of transactions. There was a 125% increase in 2016, compared to 2015 and the price index recorded the lowest overall drop compared to the other regions in Singapore.
House prices decrease in inner and central London, but show a dramatic increase in the outer boroughs
Amid months of political and economic changes, London’s property market continues to thrive. First the Brexit decision and resulting uncertainty has contributed to the decrease in the value of sterling. More recently, Prime Minister Theresa May lost a lot of ground in the General Election, which resulted in a hung parliament and weakened leadership. However, the London property market continues to be seen as a safe investment, while the weak pound opens up London’s possibilities to overseas buyers. A recent report from the University of York shows that overseas investors in London come primarily from Hong Kong, Singapore and Malaysia.
Interestingly but unsurprisingly, we’ve seen a price decrease in inner London by 4.2% according to Rightmove but more sales are being agreed as house prices are meeting buyers’ expectations.
Despite drops in some central postcodes, zones 2-5 continue to generally see increases in value with boroughs like Bexley up 4% and Greenwich up 8.1% from 12 months ago. This is partly due to developers identifying the potential of these areas and creating desirable riverside residences.
Improved transport links are making property in London’s outer boroughs and the Home Counties a viable option for Central London workers, attracting homebuyers and landlords alike. Henry Wiltshire has followed this trend and opened its newest office in Hayes in West London, combining local knowledge with the international market to bring great property opportunities to investors and sellers.
Currently the UK has an average house value of £316,000 while London’s average property value stands at £634,000. This reflects a long-standing trend, with the South East the focus of jobs and investment in the UK.
Capital appreciation keeping Dublin investors in market despite new rental regulations
A complete lack of supply of quality rental accommodation means that the average rent for a property in the city at the end of Q1 2017 is €1690, up an incredible 13.9% on Q1 of 2016. The demand for rental property has been pushed by the Brexit decision, which has seen many UK companies expand their Dublin bases in order to maintain a presence in the EU. New Irish regulations mean that rents can now only increase 4% annually, so landlords are unable to benefit directly from this phenomenon.
Why continue to invest in Dublin property? Even with the rental cap, it is still possible to see excellent returns in Dublin with property prices now approaching their highest in almost a decade. After house price inflation dropped to a low of just 1.2% last year, inflation is once again back up to 8.7%. The primary reason for this is the relaxation of lending rules, allowing first time buyers to put up just a 10% deposit on a property of any value. This has created a situation where there is nearly double the amount of people with mortgage approvals than there are properties on the market for sale.
Whilst the relaxation of lending rules has given the construction industry a much needed jump start, it is expected that the supply of new properties likely won’t come close to matching demand for another three years at least, meaning the demand for rental properties continues to grow in the short term.
Targeted marketing generates fast sales of Abu Dhabi property
The second quarter in Abu Dhabi began with preparations for the annual Cityscape Abu Dhabi exhibition. Henry Wiltshire was proud to be an exhibitor, promoting developments in the UK, UAE, Malaysia, Thailand and Seychelles. We agreed a number of sales and had great interest across the board, particularly for a development we were promoting in Reading, UK, which we then exhibited throughout Asia over the subsequent weeks – with the support of our network of regional offices.
Nudra is a highly exclusive beachside villa development in Abu Dhabi that we were delighted to be instructed on and asked to launch as sole agents. We introduced the project at a VIP dinner in the Abu Dhabi Suite of the St Regis Hotel, followed by a two week promotion in the hotel. The response was excellent and saw one third of the properties reserved without a single advertisement. Whilst the mainstream Abu Dhabi property market remains somewhat subdued, the success we are seeing with Nudra shows that quality sells.
Our international team in Abu Dhabi have been particularly busy presenting the latest properties in London to our local clients. The summer is just ahead of us, when Gulf residents typically travel to the UK to spend time enjoying the cooler summer and investing in property. Sterling is still historically weak and gives an unprecedented opportunity to acquire some excellent value investments.