Investment boom of the Asian market – the consequences

A massive expansion of new real estate in Central London to emerging markets will lead to lower prices

New properties in Central London, which are sold EN masse at glamorous property exhibitions in Asia and other parts of the world, as a speculative investment, will reduce as profitability and prices.Such sales are intended for inexperienced buyers and buy under construction can be characterized as a “feeding frenzy”

Although this method of sale eliminates the hassle of finding and the necessity of travel, modern luxury buildings, it would seem, are associated with high price, but, the ultimate price, unfortunately, are generated given the large number of intermediaries, which are included in the chain of the transaction. In turn, this leads to dramatic reduction of yields and prices for elite real estate of London.

For example, in the area Canary Wharf (real estate Investment of London. Canary Wharf tower) was built 30,000 real estate since 2000, which contrasts strongly with 500 units in Central London. Prices for real estate on Canary Wharf make up only a third of the price of real estate in Central London and they are limited in their potential for resale, as they are no longer the “Primary objects” although the majority of them no one lived. Thus, the Asian market has brought the real estate market of London is a new phenomenon.

The exception, perhaps, make only the prices of new property in Central London, Luxury apartments and penthouses in Central London , where the average price in February 2013 was £318,981, which is 8% more expensive relative to secondary objects of real estate. The average prices for new properties in London for the year amounted to just 0.37 percent per year. The old real estate London showed a price increase of 7% from £277,916 to £296,667.

And although there is a clear appetite to invest in real estate in the early stages of construction in new London from emerging economies, such investment decisions should be conducted with more caution, as the investor, investing in novelty should consider that price is indirectly integrated component of the secondary market.

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In the event of resale, the prices should be competitive. Despite the fact that the residential property market of London has now become the reserve currency for the global elite, investors should be more careful in the choice of the investment object. Of course, old objects, usually in need of repair, but after reconstruction, it is possible to derive immediate benefits than to pay more for a novelty that will lose its value.

23.04.2013. ® Angliadom