It looks as if investors from the Middle East are ready to jump in and snap up some bargains in central London. The city’s failing property market is proving a big draw for foreign investment looking to take advantage of distressed sales.
Industry experts are pointing towards areas like Nine Elms and Vauxhall as prime investment areas for investors from overseas.
Excess of luxury units
In south London, there is still a plethora of new build luxury units flooding the market. Figures show that there are around 10,937 luxury homes currently under construction, or with planning permission in this area. May of these are the sorts of luxury apartments that are out of the price range of the ordinary Londoner.
Low transaction levels and very high prices mean that people simply can’t afford it and there is a lack of buyers. This has led to a drop in prices, with the average price of homes for sale in south London at 6.2% lower in Q2 2017 than the corresponding time period in 2016.
Buying off plan
Many wealthy foreign investors want to buy apartments in bulk off plan straight from the developers. It’s likely that they are waiting for the market to weaken even further. When construction has completed, there will be too many rental properties in the area, meaning investors could fail to see the returns they want. This could also be leading to a cautious investment market.
Across the whole of London, there have been more new build homes that have been completed but are yet to be sold that at any other time in the last ten years.
Increasing number of Middle Eastern investors
Buying agents have said that there are an increasing number of Middle Eastern investors looking for London based bargains. Most of them are from the UAE, Saudi Arabia, Egypt and Jordan. There are, understandably, far fewer inquiries from Qatar due to the ongoing crisis in that area.
It seems that European buyers have been put off the market by Brexit and the current uncertainty of the consequences of leaving the EU.
About Samir Salya
Samir Salya is the Chairman of Reign Holdings and is involved in real estate and construction within the UAE and UK. Samir holds over 20 years of experience in executive management, business expansion, performance improvement, sales and marketing.