How will Brexit impact Chinese investment in UK property?

Chinese demand expected to continue despite Brexit

The UK may be one of the smallest countries in the G7, but the Chinese investment passion for it has been one of the biggest love affairs in the property industry.

And now, despite the heat of the Brexit debate leading up to the shocking referendum results of Britain voting to leave the European Union (EU), Chinese buyer demand for UK property is still expected to remain strong.

46% of respondents in a recent Juwai Brexit Survey said they felt demand for UK property demand would go up if Britain exited the EU.

Not only does a weaker pound make for enticing investment opportunities, the UK has always offered appealing lifestyle factors that will continue to be strong basis for Chinese to invest in UK property.

Back in 2012, Chinese investors reportedly bought 5% of all Central London properties sold1 – that same year Hurun Report ranked the UK among  the top five travel locations for Chinese high-net-worth individuals (HNWIs).2

Now, in the first two months of 2016, Chinese invested £560.3 million (US$792 million) in London-based commercial property – equal to 40% of the total of £1.2 billion (US$1.69 billion) recorded for the whole of 2015.3 Numbers like that have surely made industry experts fairly confident about forecasts that Chinese investment in London alone will exceed that of 2015.

Juwai Data shows a similar trend – Chinese enquiries for UK property on Juwai.com grew 17.98% in Q1 2016 alone, with enquiries on property listings valued at $1.79 billion in terms of consumer enquiry value.4

Chinese buyers not expected to be negatively impacted by Brexit

The Juwai Brexit Survey, which sourced the opinions of industry experts and investors in both the UK and China, unveiled that most respondents believed the Brexit impact would be insignificant in terms of Chinese property investment in the UK.

In fact, although UK respondents were more uncertain, China respondents indicated that – despite some holding back from transactions until after the vote – international demand for UK property was expected to increase no matter the outcome. 

Furthermore, 71% of China respondents said there would be either no change or more demand for UK property should Britain leave the EU.

Juwai.com believes the UK will continue and even grow as an important destination for Chinese property investment. Chinese consumers see UK property as a relatively safe investment compared to alternatives, and consumer demand is in large part driven by lifestyle factors, with education being the top motivator.

For students continuing their educational pursuits overseas, the UK still offers world-class universities and schools, which will continue to be in high demand. With all these factors combined, Chinese demand for property investment in the UK should remain strong for years to come. 

Juwai.com CEO Charles Pittar even notes that developers and estate agents are likely sharpening their marketing pitches at this very moment, pointing to Brexit as an opportunity for offshore buyers to snap up properties at bargain prices.

“The vote for Brexit introduces some uncertainty into the market. In a backwards way, this could promote foreign property investment. If the pound loses ground on a sustained basis and domestic buyers drop out of the British property market, the results of the vote could lead to increased opportunities and a more appealing environment for foreign investors,” he adds.

This is in line with the 46% of respondents in the Juwai Brexit Survey, who indicated they felt there would be more demand for UK property if Britian exited the EU.

“If the fall in the pound persists and if local buyers continue to sit on their hands to some degree, that will create a more appealing environment for international investors...and Chinese buyers are much more likely to take note of property prices, exchange rates, available inventory and economic conditions than the simple fact of Brexit, however,” Pittar says.

Chinese consumer enquiries into U.K. property on Juwai.com in June has remained strong with a positive outlook expected still, and we'll be watching closely to see just how things unfold for UK property seekers as Brexit looms.

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Sources: 1. Knight Frank: International investors spent £2.2 billion on central London new-build property in 2012; 2. Hurun Report: Europe Winning the Hearts of Chinese Luxury Travelers; 3. Savills: Chinese investors continue to pursue UK assets; 4. Juwai IQ Data Q1 2016; 5. Juwai Brexit Survey

5 Reasons to invest in London

With so many cooling measures and money parked in your bank, you're looking for an investment opportunity. Investing in stocks and bonds seems dangerous. The most stable investment would probably be property. Singapore's getting unaffordable. So the big question is, which country do you park your money in? Watch the video to find out why invest in London?

More information about royal wharf  visit the link.

Asians continue to invest in the West

The movement of money from Asia to Western markets in Europe and the United States will likely still be a major influence on global real estate this year, according to the Global Emerging Trends in Real Estate 2015 report jointly published by PwC and the Urban Land Institute (ULI).

The report, based on the views of senior global property investors, found that 84 percent of Asia-Pacific respondents expect cross-border capital into Europe to increase significantly.

Local money coming out of China and South Korea will continue moving into international markets, and will be supplemented in the coming years by pension fund capital from Japan.

The so-called ‘flight to safety’ effect was cited as another reason leading many investors to move capital to perceived safe havens.

Meanwhile, money flows into major assets in the UK and US is likely to shift towards less high-profile cities in Germany, France and the US, noted the report.

Simon Hardwick, PwC Legal partner and one of the report’s authors, said: “There is still a wall of capital targeting real estate opportunities in many markets across the globe. The search for better yields has taken some investors into development and secondary markets, moving them up the risk curve. But investors must strike a balance between the need to deploy capital and the ability to achieve good returns, at a time when there is such a difference in the economic conditions across the globe.

“Real estate investors have a wide range of issues to consider when making investment decisions. What is clear is that they may have to approach those decisions in a completely different way in the future. Capital allocations may need to be made to a wider range of asset types than ever before, ranging from retirement and student housing to data centres and self-storage.”

Romesh Navaratnarajah, Singapore Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg

Chinese buyers to solve Iskandar’s housing glut

The large number of residential properties in Iskandar Malaysia can be absorbed by the market claim Chinese developers, as they bring with them fresh demand from China’s growing middle class.

“We have one million owners in China, and it’s like a fan club. Wherever we go, there are just buyers that buy without any questions,” said Nicholas Hum, Sales and Marketing General Manager at Country Garden Holdings.

The Hong Kong-listed firm has been criticised for its enormous Forest City project, which is being built on reclaimed land close to the Tuas Second Link.

At a separate development in Danga Bay, across the sea from Singapore’s Sungei Buloh Wetland Reserve, the developer is building a condominium which it hopes will be as successful as its other housing projects in China.

In 2013, this project surprised the market when 6,000 of its 9,400 units were reserved within a month of its launch. Although some unqualified buyers were subsequently filtered out via the loan application process, the figure of 6,000 has remained due to later sales, Hum said.

This year, 200 units have so far been taken up at the project, and Country Garden is optimistic that more buyers from China will back this development.

In fact, the Chinese have become the largest buyers of this project, accounting for 35 percent of the units. The second largest group are Malaysians who have bought 30 percent of the units, followed by Singaporeans (25 percent).

In addition, some Chinese buyers have applied for the long-stay visa scheme under the Malaysia My Second Home programme, noted Hum.

“They’re trying to come here more frequently and without restrictions. So it’s not just a summer home, it’s a second option.”

Chinese buyers are also being lured by world-class learning institutions at the nearby EduCity and the prestigious British boarding school Marlborough College.

“A lot of them are concerned about their kids. They plan quite far ahead,” he explained.

Image: Artist’s impression of Forest City by Country Garden.

Farah Wahida, Editor at PropertyGuru Malaysia, wrote this story. To contact her about this or other stories email farahwahida@propertyguru.com.my

80% of London units sold to overseas buyers

"In the latest twist in the whole “squeezed out” debate, media reports in the United Kingdom have claimed that 80 percent of the units in a series of new Thameside developments have been bought by foreign purchasers.
As is generally the case, the definition of “foreign” isn’t entirely clear, but according to statistics obtained from Knight Frank by the Guardian, buyers from the Far East accounted for a quarter of properties sold in the four as-yet unnamed schemes. Around 20 percent have seemingly gone to buyers from the Middle East.
The newspaper claimed that 40 percent of the units were sold to investors, and has picked up on Knight Frank’s marketing material for a new scheme at Vauxhall Cross, which is quoted as saying that London is “widely regarded as the ‘gold bullion’ of international property markets” and goes on to talk about returns that have been “better than…the FTSE 100 and gold”.
A spokesman for Knight Frank explained that this level of foreign investment only related to “a narrow percentage of the market, and in the total market across London it is a much smaller proportion”.

Last year, Savills went in-depth on the subject in its World in London report. The agency found that 68 percent of prime London private residential property were owned by domestic U.K. buyers – but that 37 percent of Londoners were born overseas."

Source from property guru

Insider news is that 50% of buyers who bought Royal Wharf, a new launch condo in London are Singaporean buyers. Why are Singaporeans so invested in UK property?

1.) London is like a mini Singapore

2.) UK is the country we are most familiar with in Europe because we were once ruled by the British, hence, our education system and governing system has some similarities with London.

3.) London property are similar to Singapore. Pricey and small yet the value still goes up. 

4.) Who wouldn't want to own a property in UK?