London’s luxury residential property market is seeing the rise of a new group of international property investors. First time buyers from Hong Kong and China are now the leaders in the upmarket category, according to a report from the London-based Beauchamp Estates. According to the report, the real estate market in London experienced fast growth once the markets resumed in May after the three-month Covid-19 lockdown.
Previously, investors from Russia and India were the most prominent investors in London’s prime real estate. In the £1m+ price bracket for London's prime properties buyers of Hong Kong and China have over 15% of purchases and over 20% in the £10+ million price bracket.
According to the report,these unique first time buyers are mostly interested in buying brand new homes or picking up properties of historical importance that have been refurbished with luxurious interiors.
The Office of National Statistics (ONS) stated that a total investment of £7.69 billion was made in properties across London, including £750 million in residential units, by buyers from Hong Kong and China alone.
Its no surprise that many relate these spike to the Geo-political uncertainty in the region. The question is, will it continue?.
The Beauchamp report classifies investors and buyers into five main categories:
Group one has shown interest in buying newly developed residential apartments up to £2 million, expecting a 3-5% rental yield on their property.
Group two is spending upwards of £5 million, belonging to affluent middle-class families.
The third Group is the business elite who are looking for properties with the historical context or ultra-luxurious facilities and regularly investing £15 million or more for such properties.
Group four is the real estate developers of China and Hong Kong seeking to invest in commercial units across London.
The final segment of investors are the Chinese Sovereign Wealth entities.
Aside from the Geo-political forces at work, investment opportunities in London are attractive for the Hong Kong and Chinese buyers as the overseas buyer tax is much lower in London compared to the likes of Singapore (20%) or Canada (20%).
Furthermore, to save expenses on stamp duty, these buyers wait patiently to receive UK residency visas - or perhaps its the UK residency visas they seek overall?