2020:
A Precarious Time
Wednesday, June 10, 2020
Saturday, April 25, 2020
CANADA
Population:
2023 Ownership:
 |
US vs Canada : Construction Cost outlook by JLL
Majority of condo investors in Toronto and Vancouver - from 8 yrs ago - are long term investors [i.e. >5 yrs]
🖥: CMHC
https://eppdscrmssa01.blob.core.windows.net/cmhcprodcontainer/sf/project/archive/housing_markets/condominiumownersreporttorontoandvancouver/68161_2014_a01.pdf
🖥: CMHC
https://eppdscrmssa01.blob.core.windows.net/cmhcprodcontainer/sf/project/archive/housing_markets/condominiumownersreporttorontoandvancouver/68161_2014_a01.pdf
Foreign Buyer Ban
Unintended Consequences?
“It’s irrelevant who builds it — the issue is we want homes for Canadians,” he said. “So if we limit capital and we build less there’s less homes for Canadians.”
Federal Government Proposes
Foreign Owner Tax
https://www.bloomberg.com/news/articles/2021-04-19/soaring-canadian-housing-costs-targeted-with-foreign-owners-tax
Overview
This excerpt from Ben Meyers 2020 April 27
Municipal Taxes highest in Montreal, Halifax and St. Johns
-- C.D. Howe Institute
Hong Kongers in Canada
Wednesday, January 16, 2019
PRIVATE EQUITY
TRENDS
Asian Tycoons
Many offspring are bringing these skills back to the family and can operate without the constraints of institutional private capital.
Institutional private equity’s slow progress in Asia is due to the dominance of families as the fundamental investors in corporate activity. Asian tycoons lack trust in private equity funds and question why they should let these firms invest in their businesses. They also increasingly believe that when it comes to investing they can look after themselves.
FINANCIAL TIMES ARTICLE
by Paul J. Davies in Hong Kong
For instance, his most recent investment is a $3m punt on Bitstrips, a company that simply allows you to create a cartoon character of yourself. He also put a similar amount into Affectiva, one of whose products allows a computer to measure your emotional reaction to advertising.
Someone worth $31bn can afford to make a few wilder bets, but the really interesting thing is that Mr Li, like many other Asian tycoons and entrepreneurs, chooses to make so many such investments directly rather than through a specialist fund run by someone else.
This happens not just in highly speculative new technology, but also in other kinds of private equity investing too. Cheng Yu Tung, Asia’s fourth-richest man and the patriarch of the Chow Tai Fook and New World empire, last year turned a US dollar profit in nine figures from a private equity investment in Huishan Dairy, a Chinese milk producer, which listed in Hong Kong.
Region’s richest families are making their own deals
What do Facebook, Spotify, BitPay, Summly and Siri have in common? They all got early stage private-equity backing from Asia’s richest man, Hong Kong’s Li Ka-shing.
The octogenarian multi-billionaire made his money from some of the oldest and simplest businesses going: property and ports – where people live, work and trade, the basics of any economy. But Mr Li’s Horizons Ventures has since 2006 made tens of millions of dollars of investments into some of the most uncertain and novel ideas for businesses around, ranging from the trivial to the frightening.
For instance, his most recent investment is a $3m punt on Bitstrips, a company that simply allows you to create a cartoon character of yourself. He also put a similar amount into Affectiva, one of whose products allows a computer to measure your emotional reaction to advertising.
Someone worth $31bn can afford to make a few wilder bets, but the really interesting thing is that Mr Li, like many other Asian tycoons and entrepreneurs, chooses to make so many such investments directly rather than through a specialist fund run by someone else.
This happens not just in highly speculative new technology, but also in other kinds of private equity investing too. Cheng Yu Tung, Asia’s fourth-richest man and the patriarch of the Chow Tai Fook and New World empire, last year turned a US dollar profit in nine figures from a private equity investment in Huishan Dairy, a Chinese milk producer, which listed in Hong Kong.
Many of these Asian families have highly educated and bright children who have spent time learning finance in investment banks and private equity firms. Sonia Cheng, for example, the granddaughter of Cheng Yu Tung who now runs the family’s hotel business, spent time in investment banking and at Warburg Pincus, the private equity firm.
Many offspring are bringing these skills back to the family and can operate without the constraints of institutional private capital.
Institutional private equity’s slow progress in Asia is due to the dominance of families as the fundamental investors in corporate activity. Asian tycoons lack trust in private equity funds and question why they should let these firms invest in their businesses. They also increasingly believe that when it comes to investing they can look after themselves.
“Far more active than private equity as a whole or corporates as a whole are the Asian families,” Mr Solberg says. “It is very hard to track what they are doing in real time, but you should not forget that they are the ones really driving the [private investment] market here.”
It is true that private equity firms have struggled to deploy money in Asia. Buyouts that give funds control of a business are extremely rare, while deals for minority stakes have also been getting harder on an industry-wide basis, if not for some of the better connected individual funds.
Total private equity deal volumes in Asia last year were just $29.1bn, according to a report last week from EY, the consultants, and Mergermarket, the data provider. This is down from $33.1bn worth of deals seen in 2012 and by way of comparison is less than half the volume of deals seen in the first quarter of 2013 alone in the US.
So what are the issues? Fees are an important consideration, according to Brian Crawford, who is head of the institutional solutions group at UBS’s Asian private bank and who helps the region’s wealthy find investments. Also, many tycoons and their families do not like the perceived illiquidity of having money tied up in long-term commitments to a fund manager.
Most important, however, says Mr Crawford, is the lack of transparency the region’s wealthy families believe they get from private equity managers, and the lack of personal involvement they like to have in underlying investments.
“Making direct investments is one way in which family members can be properly involved in managing the family’s wealth,” Mr Crawford says. “But usually they are looking to get into something where they have a differentiated ability to understand a business and the risks involved.”
Their investments, therefore, are often similar to the family’s existing business, and can result in a lack of diversification. Mr Crawford says the need for diversification means many families still put some of their money to work in institutional private equity as well.
Many of these Asian families have highly educated and bright children who have spent time learning finance in investment banks and private equity firms. Sonia Cheng, for example, the granddaughter of Cheng Yu Tung who now runs the family’s hotel business, spent time in investment banking and at Warburg Pincus, the private equity firm.
Many offspring are bringing these skills back to the family and can operate without the constraints of institutional private capital.
Institutional private equity’s slow progress in Asia is due to the dominance of families as the fundamental investors in corporate activity. Asian tycoons lack trust in private equity funds and question why they should let these firms invest in their businesses. They also increasingly believe that when it comes to investing they can look after themselves.
We have been representing Tycoon's private investments for over three decades
Monday, October 8, 2018
Hong Kong
Retail
Rents are down by 41%
Who were the buyers of Hong Kong’s 5 priciest homes in 2021?
 |
📸: May Tse |
Hong Kong saw the record for per square foot prices of luxury homes being set a couple of times in 2021.
Most of these transactions were concentrated in two areas: Mount Nicholson on The Peak and 21 Borrett Road in Mid-Levels
Nan Fung Development and The Wharf (Holdings) paid HK$10.4 billion (S$1.8 billion) for the Mount Nicholson site in an auction in July 2010. At HK$32,014 per sq ft, it was the third-highest land price in the city’s history at the time
Analysts had expected it to sell for between HK$8.7 billion and HK$11.4 billion. The 2.33-hectare site was the location of government staff quarters that had sat empty for years.
The site at 21 Borrett Road was sold to the then Cheung Kong (Holdings) in June 2011 for HK$11.65 billion in an auction. Analysts had expected the site to fetch between HK$12 billion and HK$15 billion.
The price paid was the second highest at that time, just behind the HK$11.82 billion paid in 1997 for the Island Resort site in Siu Sai Wan. At HK$26,763 per sq ft, it was also the third-highest at that time.
“New Hongkongers”, or those who have recently acquired permanent residency in the city and do not have to pay the extra 30 per cent stamp duty levied on non-permanent residents for property purchases, comprised 60 per cent of the owners at these two developments, according to land title searches conducted by the South China Morning Post in June.
Who bought the most expensive homes per sq ft in Hong Kong this year?
| Buyer | Property | Price (US$ per sq ft) | Total amount (US$) |
| Lau Chauin, daughter of Heungkong Group chairman Lau Chi-keung | Two flats with parking spaces, Mount Nicholson, The Peak | 17,223 (S$23,232) 18,097 | 72 million (S$97 million) 82.2 million |
| Yin Xi | Flat on 23rd floor, 21 Borrett Road, Mid-Levels | 16,979 | 59 million |
| Qiu Mingjing, sixth largest shareholder of Shanghai-listed Beijing Wantai | Flat on 23rd floor, 21 Borrett Road | 16195 | 48.55 million |
| Investor surnamed Shan | Flat on 23rd floor, 21 Borrett Road | 16,915 | 44.23 million |
| Ni He Tong | Flat in Mount Nicholson | 14,769 | 62.98 million |
Such buyers preferred the large flats of these two projects to houses as they tended to divide time between Hong Kong and mainland China, and these flats required less maintenance, said Raymond Li, principal sales director at Centaline Property Agency. Many bought two neighbouring flats for larger spaces as well.
📸: Martin ChanMore record-breaking deals are expected in 2022, as developers tend to sell new luxury homes slowly to generate the highest price possible, Li said. Moreover, with the border with mainland China expected to open in the new year, mainland buyers are expected to return to the Hong Kong housing market and drive up sales.
Here are this year’s top five buyers of the most expensive new flats in Hong Kong on a per sq ft basis.
Lau Chauin
Lau, the daughter of Lau Chi-keung, the chairman of Heungkong Group, which has interests ranging from logistics and finance to health care and property development on the mainland, bought flats 16C and 16D in phase three of Mount Nicholson for a combined HK$1.2 billion last month.
The 4,544 sq ft Flat 16D, which comes with three parking spaces, sold for HK$639.8 million, or HK$140,800 per sq ft, making it Asia’s most expensive flat on a per sq ft basis.
It broke the record held by a flat in CK Asset Holding’s 21 Borrett Road project. That flat, which also comes with three parking spaces, sold for HK$459.4 million, or HK$136,000 per sq ft, in February.
The 4,186 sq ft Flat 16C sold for HK$560.92 million, or HK$134,000 per sq ft.
Yin Xi
Yin, about whom little is known and whose name is identical to the director of five closely held companies, according to the Companies Registry, bought Flat 1 on the 23rd floor of 21 Borrett Road in February, according to Land Registry documents.
The five-bedroom flat in the project’s phase one sold for HK$459.4 million through tender and held the record before Lau’s purchase of flats 16C and 16D in Mount Nicholson.
The 3,378 sq ft flat in Hong Kong’s Mid-Levels , at HK$136,000 per sq ft, broke a record held by flats 12C and 12D at Mount Nicholson. These flats sold for HK$1.17 billion, or about HK$132,100 per sq ft, in November 2017.
The buyer is a Hong Kong permanent resident, as documents showed that they only paid a basic stamp duty of 4.25 per cent for the Borrett Road property, or about HK$19.52 million.
Yan Hongyan
Yan reportedly bought Flat 6 on the 23rd floor of 21 Borrett Road for HK$377.37 million in March, and then transferred the title to Qiu Mingjing in June. At 2,995 sq ft, the flat’s price translates to HK$126,000 per sq ft.
Qiu is a big investor in Hong Kong property. She was the sixth-largest shareholder of Shanghai-listed Beijing Wantai with 4.8 million shares, or a 1.1 per cent stake, according to the firm’s 2020 annual report
Shan
An investor with the surname Shan, whose first name is not known, reportedly bought Flat 3 on the 23rd floor of 21 Borrett Road for HK$344.1 million in April. At 2,731 sq ft, the price translates to HK$126,000 per sq ft.
Shan is said to have paid an extra 15 per cent in stamp duty, or HK$51.6 million, as it was not their first property.
Ni He Tong
Ni bought flat 8C in phase three of Mount Nicholson for HK$490 million in January, according to media reports citing Land Registry records.
At 4,266 sq ft, the price translates to HK$114,906 per sq ft. Ni was said to be a first-time buyer, having paid only 4.25 per cent in stamp duty, or HK$20.83 million.
This article was first published in South China Morning Post.
Kadoorie Hill
Estates at The Peak Where The Seriously Rich Live |
| Estates At The Peak in Hong Kong |
📸: Andrea Eng 2021:
"About 50% of Hong Kong's ultra-luxury homes [in the past two years] have been sold to wealthy mainland Chinese or so called new Hongkongers," said Martin Wong, director and head of research and consultancy for Greater China at Knight Frank. "Buyers from the mainland are willing to pay big bucks for homes on The Peak as spectacular views like those of Victoria Harbour are rare in China."
JLL Yearend
https://www.jll.com.hk/content/dam/jll-com/documents/pdf/research/apac/hong-kong/jll-en-hong-kong-residential-sales-market-monitor-december-2021.pdf
HISTORICAL
Prices at the Peak — http://www.jll.com.hk/hong-kong/en-gb/Research/Residential%20Market-2018-09.pdf
Low turnover - just 13 transactions per annum http://www.thestandard.com.hk/breaking-news.php?id=114674&sid=2
Hello 太太 | London
Palace Street
Rutland Gate in Knightsbridge
Location:
Previously reported:
“2-8a Rutland Gate is in the process of being acquired by funds advised by the Family Office of Mr Cheung Chung-kiu”. Chung-kiu, better known as CK, is a Hong Kong-based billionaire who owns a string of property companies, including CC Land Holdings. He owns part of the former Whiteleys department store in Bayswater and 122 Leadenhall, the triangular-shaped skyscraper in the City of London better known as the Cheesegrater and worth more than £1bn. However, CK was never the ultimate owner of 2-8A Rutland Gate. He appeared to be, according to Land Registry filings, just a frontman – but more of that later.
Now:
The house has lain empty since the auction, even after its record-breaking sale in 2020, purportedly to Chung-kiu, the Hong Kong property billionaire. However, it is in fact owned – very indirectly and offshore, of course – by his Chinese poker club buddy and fellow Chinese property billionaire Hui Ka Yan. He is the founder and majority shareholder of Evergrande, a Chinese property empire that declared bankruptcy in 2021 and is now restructuring its $270bn debts.
Hui’s estimated personal fortune hit $42bn in 2017, making him the second richest person in Asia and among the top two dozen wealthiest in the world.
Rich people from China started moving to London after the handover of Hong Kong in 1997, with numbers increasing dramatically in the 2000s. In 2021 a record 650 high net-worth individuals – classed as those with cash assets (not including their home and its contents) of at least £10m – moved from China to the UK.
Since then the Chinese property bubble has burst and Hui’s wealth has plummeted to about $3bn, causing him to fall off Bloomberg’s list of the world’s 500 richest people. In urgent need of cash to stave off the collapse of his empire, Hui has been disposing of an array of assets, including two luxury Chinese apartments and two private jets. Now this London mansion and his 60‑metre super-yacht Event are on the block.
In Hong Kong,Evergrande's hq was taken over by receiver; and has failed to sell
https://www.bnnbloomberg.ca/evergrande-s-hong-kong-headquarters-taken-over-by-a-receiver-1.1817977
Battersea
Selfridges Sold to Thai & Austrian Interests
A Hotel is Coming
https://www.dailymail.co.uk/money/markets/article-10356513/New-Selfridges-owners-plan-luxury-hotel-site-flagship-Oxford-Street-store.html
Most Expensive Residences
Heady days of retail Selfridge's and Harrod's pre-Covid
📸: Hello 太太
RETAIL 💔
Selfridges and Harrods Lay Offs
Brown Thomas Lay Offs
Marks & Spencer
Marks & Spencer plans to cut about 7,000 jobs over the next three months after its clothing business was hit hard by the coronavirus lockdown
https://www.bloomberg.com/news
https://pages.pagesuite.com/5/
https://www.bloomberg.com/news
https://pages.pagesuite.com/5/
Cockpit footage from a flypast by the RedArrows to mark the 75th anniversary of VE Day. Several London landmarks in sight as the Royal Air Force Aerobatic Team paid tribute
Notes:
The Walkie Talkie Building
In 2017, Lee Kum Lee bought 20 Fenchurch for $1.7 billion USD
Our tour of the interior of 20 Fenchurch [double click the link]
📸: Andrea Eng
Peninsula Group and Grosvenor in LondonGrosvenor and the Penninsula Group are developing at Hyde Park Corner. Project will be complete in 2021
📸: Hello 太太
SHKP in London
The Kwok family and Ballymore have made a huge bet on the London residential market by buying a £1bn skyscraper scheme in the Isle of Dogs, E14
Through its controlling stake in listed developer Sun Hung Kai Properties, the Hong Kong family has bought two connected sites from Galliard with planning consent for six towers rising to 44 storeys in a joint venture with the Irish developer.
In total, the 898-home 6-8 South Quay and 615-home 3 Millharbour, collectively known as Millharbour Quarter, will deliver 1,513 homes on the Millwall Dock.
The pair paid £50.8m for the sites, according to the Land Registry, through the companies Great Eastern Nominee 1 and 2, and which list Sean and John Mulryan of Ballymore and board members of Sung Hung Kai as directors...
MORE > https://www.egi.co.uk/news/kwoks-and-ballymore-in-1bn-canary-wharf-resi-push/
Alongside their investment into Lillie Square with Capco at Earls Court, they announced another tie up with Ballymore in 2017 to become partners in the Goodluck Hope scheme in Poplar, a riverside development of 800 homes.
The Wealthiest Property Owners In The UK
1. David and Simon Reuben, £15.096bn
These India-born brothers initially made their money from aluminium, but poured their fortune into London’s booming property market. They own a mass of top-end real estate in the capital including Westminster’s Millbank Tower and John Lewis’s head office, near Victoria Station. They also have prime sites in Mayfair, Kensington and the West End - including the former premises of the Naval and Military Club, which they are now turning into a luxury hotel. Now in their late 70s, the pair were last year tipped as potential buyers for Newcastle United Football Club.
2. The Duke of Westminster and the Grosvenor family, £9.964bn
The 7th Duke inherited his title on the death of his father two years ago - and with it oversight of 300 acres of Belgravia and Mayfair. He and his family also own land and property in Oxford, Cheshire, Scotland and Spain. Other assets include nearly 165,000 acres of rural land, a dairy farm and the UK’s largest bull stud operation.
3. Sir David and Sir Frederick Barclay, £7.4bn
Best known for owning London’s exclusive Ritz Hotel and the Telegraph newspaper, the Channel Island-based twins also own the massive retail operation Shop Direct. The Barclays made more than £2bn from the sale of the Maybourne Group of hotels - which included the world famous Claridge’s. They live in a gothic castle on the Channel Island of Brecqhou.
4. Earl Cadogan and family, £6.7bn
The Cadogan family have owned nearly 100 acres of Chelsea and Kensington for 300 years. Almost 50% of the £6bn portfolio is retail space, mostly around the chichi shopping destinations of Sloane Square and the King’s Road. The rental income at the family’s main business grew by 10% to £142.7m in 2016.
A two-bedroom flat for £1.5m above the shops on the famous King's Road in Chelsea. The Earl of Cadogan and his family own much of the retail space here and in Sloane Square.
5. Sir Henry Keswick and family, £4.782bn
Hong Kong conglomerate Jardine Matheson has interests ranging from property and hotels to food and cars. Much of its wealth stems from its operations in China and it has a £35.2bn value on the stock market. The Keswicks have a holding worth nearly £4.7bn.
6. John Grayken, £4.763bn
This American investor is pouring money into an area near Wembley Stadium. His Quintain property company has plans for 7,000 homes and London’s biggest Boxpark – a foodie heaven selling dozens of different delicacies from around the world. Grayken also owns a $35m penthouse in his home town of Boston, Massachusetts.
7. Baroness Howard de Walden and family, £4.015bn
A 92-acre estate of Marylebone has been in the de Walden family since 1879. Their tenants include much of Harley Street’s private medical community and chichi shops on Marylebone High Street. Sixty members of the de Walden family own stakes in the main company.
8. Ian and Richard Livingstone, £3.8bn
After selling a chain of opticians, these two brothers went into property development. Their recent ventures have included some eye-catching Hollywood homes and a £6bn development in Panama. They also own hotels in London, Ibiza, Barbados and Monte Carlo.
9. Eddie and Sol Zakay, £3.42bn
Student accommodation is the next investment for the Zakays, who have won approval for a £100m scheme in Wembley. The pair made their money from dozens of property deals with Tesco, Marks & Spencer and other retailers. The Israeli-born brothers also own hotels.
10. Mark Pears and family, £3.245bn
The Pears’ £6bn property portfolio is said to house 1% of the UK’s workforce. Rising rents and the £10m sale of a Bloomsbury property have increased their wealth over the past year. Members of the family are understood to have made $100m from the stockmarket float of Facebook.
11. Samuel Tak Lee and family, £3.037bn
This Hong Kong billionaire owns a big stake in property company Shaftesbury, which owns a large part of London’s Carnaby Street and Chinatown.
12. Richard Desmond, £2.6bn
After selling Express Newspapers, Desmond is hoping to win the National Lottery franchise. He has been involved in property developments worth around £1bn.
13. Teddy Sagi, £2.6bn
The Israeli gaming entrepreneur owns London’s Camden Market and recently bought the capital’s Bupa House for £70m.
14. John Whittaker and family, £2.25bn
A Lancashire-born property mogul, Whittaker has overseen vast developments across the North West and owns a big chunk of retail park business Intu.
15. Viscount Portman and family, £2.002bn
The Portmans own 110 acres of London real estate in central London and 500 residential properties.
16. Sheikh Hamad Bin Jassim Al Thani, £2bn
This Qatari investor was one of the main backers of the Candy Brothers’ One Hyde Park development – where apartment prices started at £20m.
17. The Lazari family, £2bn
This Greek Cypriot family own 2.8m square feet of commercial real estate and 113 residential properties, mostly in London.
18. John Bloor, £1.858bn
A former plasterer from Derbyshire, Bloor made a fortune from housebuilding and has also revived the Triumph motorbike brand.
2019 June 2019 FINANCIAL TIMES
Is now the right time to buy property in London?
Lottie Bodilly has just bought her first home. After months of searching, the 25-year-old, together with her partner, Jackson, has found a large two-bedroom apartment in a Victorian building in Streatham, south-west London. The couple completed last Friday. The price: just under £500,000.
“The vendors had a lot of interest and we had to go to sealed bids,” says Bodilly, a web publishing entrepreneur. “We moved quicker than we would have liked because the market was a little sparse and we were nervous about how many more homes were going to come up for sale. But we liked it,” she says, “so we went for it.”
If Bodilly had waited, would she have got a better deal? The property market in London is in turmoil. In the first three months of this year, prices were down 4 per cent on the first quarter of 2018, according to Nationwide, and 5 per cent down on their peak the year before.
In January, the number of homes sold fell to its lowest in a decade. Last week, shares in Foxtons, the London-focused estate agency, were trading at about 53p, down 87 per cent since their peak in 2014. All this with Brexit unresolved, and a no-deal exit on 31 October still possible. If that were to happen, house prices could drop 30 per cent in the next three years, according to the Bank of England stress test’s worst-case scenario.
But Bodilly is undeterred. “Neither of us are particularly concerned about Brexit,” she says. “This is our first house and we’ll probably be here for three to five years at least, so we were more concerned that we wanted to buy in an area that was going to come up.”
Many property agents and experts agree with her. They say early indicators suggest the slump in London’s housing market may be about to end. This, of course, is exactly the kind of thing estate agents like to say, so how can we be sure? The answer, of course, depends on your circumstances, but let us look at the evidence to help you decide whether to make a move — or wait it out:
What the data show
The seasonal nature of the housing market makes spotting short-term trends difficult, and the recent fall in transactions makes it even harder. Still, there is some evidence the market in London could be about to turn. The proportion of London homes with falling values peaked last autumn at about 80 per cent, according to Zoopla, the online property portal. By the beginning of 2019, that proportion had fallen to 68 per cent. The proportion of homes showing monthly falls has dropped below 30 per cent for the first time in tin two years.
The fall in prices may be slowing, too. According to Rightmove data released this week, average asking prices are still lower than where they were a year ago in 28 of London’s 32 boroughs. However, 23 boroughs are now reporting monthly increases. Based on a rolling three-month average, asking prices were up 2.3 per cent in Westminster at the beginning of June, compared with the beginning of May — up 1.5 per cent in Haringey, and 1.2 per cent in many boroughs, including Kensington and Chelsea.
These are only asking prices — and they may be inflated by pricey new developments in those areas — but there is evidence that sellers are setting more realistic prices. According to Richard Donnell, head of research at Zoopla, in mid-2014 the median asking price of a home new to market in London was between 20-25 per cent higher than the median selling price. By the end of last year that gap had closed.
Sellers have less time to wait for a deal, too. The average selling time seems to have peaked, according to data from Rightmove. In May a home spent an average of 72 days on the market before selling; down from 89 days in January.
Luxury homes have been hardest hit during the housing downturn. Prices of central London’s prime properties — which account for the top 5 per cent of the market by value — have fallen by more than 19 per cent since 2014, according to Savills. But again, these are falling more slowly this year. In the first three months of 2019, prices were level in Mayfair and Kensington.
Over the past five years they have fallen 24 per cent and 21 per cent respectively. In Notting Hill and Holland Park — both of which have seen price falls of more than 15 per cent since 2014 — transaction numbers have increased and prices have risen, albeit by less than 1 per cent.
What the agents say
“After such a large adjustment — even greater in international currency terms — London is starting to look like pretty good value,” says Lucian Cook, director of Savills Research. “And very good value in comparison to its competing world cities.”
Tired of waiting, buyers have decided to push ahead, says Tom Bill, head of London Residential Research at Knight Frank. In the first quarter of this year, Bill says his agency received the highest number of offers on homes in prime central London for 10 years, and in April, it reported 8.2 new buyer registrations for every new instruction across London — the highest ratio for 15 years.
“Buyers have been watching the market for value and holding off,” he says. “But only up to a point can they hold out. Now they want to make a decision — and they’re looking beyond Brexit.”
“People are a little bit bored of talking about Brexit,” says Simon Hedley of Druce and Co, an estate agent based in Marylebone in central London. He says stamp duty reforms of 2014 and 2016 have had a much bigger effect on the market. They increased the tax bill on all homes priced above £937,500 and added a 3 per cent premium on second homes.
Nine out of 10 of Hedley’s buyers have to pay this premium, he says. On a property price of £2m, the stamp duty rate is now 3.7 percentage points higher than it was before 2014 — an additional cost of about £74,000. But it is not all bad news for buyers: according to Savills, prime prices in Marylebone have fallen 7.8 per cent since 2014, meaning that buying the same property now, including the increased stamp duty, should still result in a net saving of more than £105,000 on the total cost in 2014.
What the developers say
New developments may be particularly exposed to property market fluctuations because they tend to be more speculative purchases and are popular with international investors. “Since spring there has been a surge in demand from owner-occupiers for some of the best apartments in our developments,” says Gabriel York, co-chief executive of Lodha UK.
The Mumbai-based developer has two luxury projects in London: Lincoln Square, a development of 221 homes near Lincoln’s Inn Fields, where a one-bedroom flat costs £1.6m; and One Grosvenor Square, a development of 48 homes in Mayfair, where two-bedroom apartments start at £8m.
York was unable to give the latest sales numbers to the FT, but as of 31 March this year, Lodha had sold 12 homes at One Grosvenor Square and 146 at Lincoln Square, according to Moody’s. According to Vikas Halan, senior vice-president at the rating agency, London sales in the nine months to December 2018 were only half what Moody’s expected — a factor in its decision in May to change Lodha’s outlook to negative.
So is now the right time to buy property in London?
If prices in prime central London recover, the effect will probably filter down into what Lucian Cook calls London’s “wealth corridors” — those swaths of smart homes that radiate from central London into areas such as Fulham, Wandsworth, Chiswick and Islington. However, despite there being the general belief among estate agents that benefits will trickle down — because that is what happened after the financial crisis, the last time house prices slumped — that may not be the case this time, says Neal Hudson director of Residential Analysts.
“There has not been any real correction in the wider London market,” he says. “In fact, it looks like more of a stagnation that correction. The big transaction falls happened a couple of years ago and now the number of sales are just bumping along at very low levels and house price growth is kind of going sideways.”
Affordability has barely budged and, thanks to stamp duty reforms, and the removal of certain tax breaks for landlords, there are far fewer buy-to-let investors in the market than there were five years ago.
“We are probably at peak first-time-buyer pricing, given that mortgage rates and lending criteria are where they are,” says Hudson.
How likely are they to change? At present, mortgage lenders are required to limit the amount they lend above the 4.5 times-salary threshold to 15 per cent, says David Hollingworth of L & C Mortgages. “Lenders must demonstrate borrower affordability, so there isn’t necessarily any great growth in the amounts that the majority of borrowers can secure without growing income,” he says.
“I’m not necessarily convinced it is a good time to buy,” says Hudson. “Not least because there are still massive political and economic risks in the event that something stupid happens with Brexit. The risks of waiting six months are minimal.”
But waiting is not right for everyone. Lottie Bodilly and her partner would have certainly lost out on a flat they loved if they had not committed to buying it. They can afford the mortgage repayments and they intend to stay for a while.
If you put your life on hold in the search for conclusive proof that the property market has reset itself, be prepared to wait for a long time indeed.
2022
FT (£) “The Scalpel’s owner, US insurance group WR Berkley, is in the final stages of talks with property investor Ho Bee Land and a deal for roughly £820mn could be signed off as soon as this week.”
https://www.ft.com/content/cf455a27-be1e-4d17-9090-39cee3ee7178
Chinese retreating [but other Asians are replacing them]
2019
Largest Transactions 2018
Lloyds in the City
太太:
1. The Diamond is next to the Gherkin which I almost bought for tycoon Richard Li four years ago - I was first in line with the Receiver before international financier Safra bought. Management at Pacific Century Premium Developments, killed the deal; I had already retained legal team to represent us. We would be ahead by ~ $500 million USD by now. #timingiseverything
2. Lai Sun's co-investor in The Diamond include our UBC classmate who is Vice Chair of Asia Standard, a respectable medium size publico in HK with holdings globally. In Vancouver, Asia Standard is developing the former 'Cloud 9' site on Robson Street
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