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London property market is now risky?

I think it’s worth noting a piece of news I read in a local English daily. Especially for those intending to buy in London currently. According to UK daily The Independent, Sime Darby’s luxury homes in the Battersea development has experienced a 10-percent drop in value. This is because of the dampened demand and the currency volatility today. Ringgit and other South East Asian currencies have been falling with China’s current economy uncertainty. Due to this negative sentiment, it has also affected the interest level of buyers from Malaysia and South East Asian regions.
Cheshire Pau, Emeritus professor of economic geography at the London School of Economics offer an even more sobering fact. London property market is now seen as ‘risky’ investment. The paper cited global property consultant Knight Frank as saying that purchases of prime London properties by Chinese-ationals, Russians and Singapore has slumped in first 6 months of 2015 versus the same period in 2014. This may have been affected indirectly by a report by Transparency International that revealed that over 36,000 London properties including up to 9.3 percent properties in city of Westminster that were owned by offshore companies for which identity is protected.
I do not own any overseas property. This is because there are a lot more complexities because the property market in such advanced markets may already be very highly priced. The currency fluctuations may not happen in our favour. It is also not easy to manage the property. Thus, I believe that any foreign property investment must be evaluated more carefully compared to if I am buying in an area that I am familiar with. Maybe the message is, unless you really have lots of money to spare, it may not be worth taking on such a ‘faraway’ calculated and risky investment. If the question is asked again in 15 years time and I am serious in sending my children for studies overseas, then the buying decision may be a clearer and easier one. Happy visiting London.
written on 27 Aug 2015
Next suggested article: London housing shortage, Eco World adds 2,773 units

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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