For years now, prime central London has been a popular location for Asian investors; however, The Wall Street Journal reported that the outlook for the market in 2016 is not all that great. Some experts are even predicting that prime real estate in Central London may see little to no growth over the next couple of years.
According to research from Savills, prices in prime London will have fallen by two percent before the year ends. Lucian Cook, director of residential research at Savills, told the newspaper that the prime London market appeared to be overvalued. The company predicts there will be zero growth in prime central London next year, followed by a two percent increase in 2017. Things should pick back up by 2018 when market growth of five percent is expected.
Residential properties priced above GBP5 million have been affected the most this year. Property-market analyst LonRes noted that demand fell by a little less than 60 percent in the third quarter of 2015 when compared with the second quarter. The Wall Street Journal also stated that this area 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,” Trevor Abrahamsohn, owner of Glentree International estate agents, told the newspaper.
Agents also believe that international buyers will come back into the market but not necessarily look for properties above GBP5 million. The WSJ added that real estate experts believe billionaires from India could end up buying prime London property while the strengthened dollar gives buyers from the U.S. a better value in the U.K. than in previous years.
“At the sub-£5 million level, expect Chinese buyers to flock to London due to recently reduced constraints on gaining U.K. visas for purchasing properties,” Giles Hannah, senior vice president of Christie’s International Real Estate, stated.
