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real estate

London

QIB – London real estate sector on recovery path

Posted on July 1, 2021

London’s Real Estate Sector Coping with COVID-19

Qatar Islamic Bank-UK has said since the emergence of the Pandemic, the London prime residential markets are exhibiting signs of successfully being able to cope with most of the COVID-related disruptions, supported by the stamp duty holiday in place since summer 2020.

According to data consultancy LonRes, the number of Prime Central London (PCL) transactions that took place in March 2021 is considered the highest since 2016.

The number of properties sold in the first five months of 2021

This sharp improvement in market sentiment can be partly attributed to the success of the UK’s vaccine program and the first signs of travel reopening. This optimism, though, is susceptible to any changes that might occur in the pandemic course.

In fact, the resilience of the Prime Central London and Prime Outer London (POL) markets is not just the result of the relative success of the fight against Covid, it is now clear that the markets did, indeed, enter Q2 with the benefit of a protective buffer of unsatisfied demand, as many had predicted it would. This buffer is expected to persist, if the latest reports from  real estate agents  describing  clients’ eagerness to purchase, once international travel restrictions are relaxed, prove to be reliable.

Property Types & Locations in Demand

Overall, early lockdown enthusiasm for large family homes with  good access to open areas such as parks, beaches  and countryside, remains in demand. The market is also witnessing demand in East London as the prospect of return-to-work improves. There is an increased demand specifically in locations close to employment hubs in the capital city, like Docklands and Midtown, and specific SE/S Outer London locations, such as Clerkenwell, Shoreditch, and Victoria Park.

These locations also have the advantage of shorter average home-to-office commute times providing a better alternative for those who are keen on avoiding lengthy exposures in public places during any future potential virus breakouts or pandemics.

Market Updates

European Prime Property in Short Supply as Demand Increases

Posted on June 7, 2021

Evidence of prime stock shortages in European residential markets is growing, owing to an increase in pandemic-induced sales.

In Europe, the resort, coastal, rural, and alpine markets are feeling the pinch, and this is expected to worsen in the coming months.

The strong sales rates we’ve seen in the last 12 months have been driven almost entirely by domestic buyers, once borders reopen and cross border transactions normalise, it is expected that stock levels will reduce further.

Strong demand, along with sellers’ reluctance to list their home until they know what they want to do next, has resulted in fewer listings in recent months.

With listings declining, existing inventory being absorbed and construction rates lagging, stock levels are becoming increasingly constrained, and inevitably it is the best-in-class properties that are selling fastest.

“European cities are also back on the radar of second home buyers and investors.”

What Next?

Prices are expected to increase across most European markets in 2021, with Lisbon, London, Geneva, Berlin and Paris to be amongst the frontrunners.

“The big question is will prices accelerate or will sales slow as a stand-off emerges between buyer and seller”

In the short-term prices look likely to track higher. Knight Frank’s latest Prime Global Cities Index which tracks the movement in luxury prices across 56 cities confirmed that 11 recorded double-digit price growth in the year to March 2021, up from just one a year earlier.


Where in Europe are the stock shortages?

CountryLocationPrice Band
FranceParis€3m-€7m
 Chamonix€1m-€3.5m
 Megeve€2m-€6m
 Val d’Isere€1.5m-€4m
 The Three Valleys€1m-€4m
 Provence: Saint Remy, Uzes, Vaison la Romaine€800,000-€2.5m
 Inland Cannes (Mougins, Grasse)€3m-€6m
 SwitzerlandVerbierApartments  CHF2m-5m
 VillarChalets CHF2m-4m
 GenevaHouses & apartments in the CHF3-10m
 ZurichHouses CHF10m+
PortugalWestern AlgarveVillas between €750,000-€2m
ItalyLake Como€1m-€4m (Turnkey projects)
 Chianti/Siena€3m-€6m
 SardiniaCosta Smeralda
 MilanLarge apartments €4m+
SpainSW Mallorca€2m-€5m
 MarbellaNew developments
Source: Knight Frank
Singapore

The Super Rich Are Choosing Singapore as a Safe Haven

Posted on June 2, 2021

According to Bloomberg large numbers of the ultra-wealthy are pouring into Singapore. Family offices, luxury car sales and real estate prices are booming.

The the number of single family offices in the city-state has doubled since the end of 2019, demand for private golf club memberships is soaring, real estate prices have jumped the most since 2018, Michelin-star restaurants are packed, demand for private jet hangar space has rocketed and global banks like UBS are expanding in the city to manage the massive influx of assets.

The influx of foreigners is helping to fuel the property market, with the strongest growth in the luxury sector. It’s also made Singapore an outlier in the rental market, with rates rising even as they fall in New York, Hong Kong and London.

A shortage of prime property in the sales market is also showing up, particularly penthouses or units larger than 3,000 square feet. A shortage of new projects is drawing buyers to second hand stock and there were 15 deals to buy penthouses built between 1991 and 2016 during the first quarter. An S$18.0 million (£9.6 million) deal for a 7,266-sf penthouse in St Regis Residences topped the list.

It takes USD2.9 million to be in the top 1% in Singapore, which places it fourth globally and number one in Asia. Even so, the number of prime properties, which generally define as the top 5% of the market, is constrained relative to other global cities. In London, for example, prime housing stock amounts to just shy of 70,000 homes. In Singapore that stands at just over 10,000.

Singapore makes it relatively easy for the super rich to settle. Through its Global Investors Program, the country grants a fast-track to permanent residency to qualified business owners or families if they invest S$2.5 million in a local business, certain funds or a family office with at least S$200 million in assets.

Wallich Residence, Guoco Tower, occupies the 39th to the 64th floor. It is home to the most expensive penthouse in Singapore, which was recently purchased by British billionaire James Dyson for $54.2 million.
Investing, London, Market Updates

What’s next for the UK’s prime property market?

Posted on May 20, 2021

Eight factors shaping the top end of the UK’s property market


The UK’s prime real estate markets are set to continue to increase for the rest of this year at least, according to Savills research. Country houses and regional locations are likely to continue to be in high demand as lockdown lessons stay fresh in buyers’ minds, while London and city markets are due for a resurgence as hospitality re-opens and international buyers enter the market as travel resumes.


  1. We anticipate the lifestyle drivers that have influenced the prime markets since they reopened a year ago will continue to do so through the remainder of 2021.
  2. Lifestyle drivers will result in continued price growth across the prime markets beyond London, especially in the country house and coastal markets where there is the greatest imbalance in supply and demand.
  3. The continued relaxation of social distancing measures and the rollout of the vaccination programme in the UK will underpin a return to price growth in the prime London markets during the second half of 2021.
  4. Markets that have traditionally been dominated by those living and working in the capital’s financial and business districts, such as Canary Wharf, will begin to see demand increase more as workers start to return to the office.
  5. As international travel gradually resumes, we expect to see a more pronounced recovery in prime central London prices from 2022 onwards, in a market that looks good value in both a historical and international context.
  6. In more domestic markets, an increased requirement for space will continue to underpin demand in 2022, though we expect to see some rebalancing between London and the country as changes in buyer preferences, sparked by the pandemic, become less of a driver.
  7. Longer-term price growth across all markets will be underpinned by a low interest rate environment, though this will be tempered by the prospect of higher taxes as the government seeks to restore public finances.
  8. As has occurred in the past, a general election will slow the market in 2024. That could interrupt the pace of recovery in central London, which is most exposed to the risk of higher taxation in the event of a change in government.


Prime Residential Forecasts

202120222023202420255 Year
Prime Central London3%7%4%2%4%21.6%
Outer Prime London2%5%3%2%2%14.8%
All Prime London2.5%6%3.5%2%3%18.1%
Suburbs5%3.5%3%2%3%17.6%
Inner Commute5%3.5%3%2.5%3%18.2%
Outer Commute5%3.5%3%2.5%3.5%18.7%
Source: Savills Research

Prime Rental Forecasts

202120222023202420255 Year
Prime London3%7%4%2%4%21.6%
Prime Commuter Zone2%5%3%2%2%14.8%
Source: Savills Research
London

Prime Central London Sales of £5m+ hit a seven-year high

Posted on May 12, 2021

142 property sales above £5 million were recorded in Prime Central London in the first four months of this year, with a combined value of £1.42 billion.

The top-end of London’s property market continues to recover, with more £5m+ sales recorded in the first four months of 2021 than in any year since 2014.

There were 43 sales above £5 million during April 2021, according to Savills; the highest April figure since 2014. This brings the total for the first four months of the year to 142; that’s also the highest figure since 2014 (when 159 deals were recorded), and comes in a third higher than in the same period in 2020, and 65% up on 2019.

The total spent on these deals has also increased, reaching £1.42 billion in the first four months of the year; 32% more than in 2020, and 63% more than in 2019.  That puts the average deal price at just over £10 million.

Number of sales over £5 million in London

All sales over £5m in London, total value (£bn)

£5m – £10m£10m+Total
Jan-Apr 2019£0.40bn£0.47bn£0.87bn
Jan-Apr 2020£0.53bn£0.55bn£1.08bn
Jan-Apr 2021£0.71bn£0.71bn£1.42bn

Source: Savills

Market Updates

Hong Kong remains as the world’s most expensive city to rent

Posted on May 4, 2021

When it comes to the price of renting luxury real estate, Hong Kong is still on top.

The city retains its title as the world’s most expensive city to rent a luxury apartment, according to a report from Knight Frank. The report examines the cost of a three-bedroom apartment in a central location across eight different cities.

Prime rents in Hong Kong stood at $6.70 per square foot at the end of 2020, and a monthly budget of $10,000 would get a renter less than 1,500 square feet of space. In New York City, which ranked No. 2, the same budget would get a renter 2,249 square feet of space.

Singapore, London, and Sydney respectively follow behind Hong Kong and New York City when it comes to the cost of renting a luxury apartment.

One of the key reasons people choose to rent in expensive locations is due to raised purchase, ownership and sales costs in recent years.

As an example, foreign buyers looking to purchase in markets such as Hong Kong and Singapore would have to pay between 15% and 20% in additional stamp duties on top of existing rates for domestic buyers, making renting a more attractive option.

Prime renters also seek flexibility and an the opportunity to ‘try before they buy’.

London

Q1 2021 Prime London Property Index

Posted on May 3, 2021

The London prime property market was as busy as it’s ever been over lockdown, but prices are still finding their feet.

+27.3%

Rise in number of properties sold compared with Q1 2020, just as the first lockdown hit.

18 Days

Properties are selling 18 days more quickly than this time last year.

-4.7%

Fall in prices compared with same period last year.

Source: Coutts & Co, LonRes, April 2021

  • With properties spending less time on the market compared to a year ago, sellers appeared to prioritise a quick sale rather than hold out for a higher price this quarter.
  • Overseas buyers, an important source of demand for central London homes, have faced travel restrictions with fewer able to make the trip over to purchase or view prime property, which may also have impacted prices.
  • Activity in the London prime property market continued to rise in Q1, despite the conditions of lockdown.
  • The impending stamp duty holiday deadline on 31 March spurred on purchasers looking to take advantage of the savings. The deadline was extended in March, but by then many buyers were ready to complete.
  • While the number of overseas buyers has been low due to travel restrictions, the arrival of a 2% stamp duty surcharge on overseas buyers at the end of March acted as an incentive for them to transact, too.
  • New instructions were slow at the start of the quarter as many sellers assumed they’d left it too late to benefit from the influx of buyers hoping to meet the stamp duty holiday deadline and others were put off by lockdown. In March, the stamp duty extension and positive news on the easing of lockdown restrictions resulted in a surge in new instructions, making up for the slow months.

Prime Property Market Trends For 2021

Low Interest Rates Will Support Demand

The prospects for economic growth in 2021 have led to higher inflation expectations and rising bond yields (that is, falling prices). However, there’s no sign of any change in the Bank of England base rate in the UK. We continue to expect a very favourable low base rate regime for the next two to three years, which will continue to support demand for residential property.

Buyers And Sellers Emerge From Lockdown

As restrictions ease through the year, the previous ways of transacting are likely to re-establish themselves. We expect that this will see an increase in new listings as seller reluctance over viewings recedes. The real estate sector has done well to mitigate the barriers put up during lockdown, and some of these innovations – such as remote viewings – could stick, particularly for overseas buyers.

Return Of Overseas Buyers

We expect increased interest from overseas buyers as travel restrictions ease through 2021. Overseas interest in commercial property is already evident, reflecting an undervalued currency and attractive yields. Commercial estate agent Colliers reports that £3 billion was invested in UK commercial property in March, with overseas investors accounting for half of the assets. We expect trends in residential to follow commercial through 2021.  


Prime London Area Focus – Q1 2021 Performance

Use the map and postcode selector below to see how each area performed last quarter.

Read full report from Coutts

Market Updates

Monaco is still the world’s most expensive real estate market

Posted on March 31, 2021

Despite the upheavals of 2020 that rocked markets worldwide, Monaco still remains a highly desirable location.

The Monégasque market remains the most expensive location to purchase residential property worldwide, with an average price per square metre of over €47,000, though that figure is down 1.1% from 2019 levels. Hong Kong, the second most expensive location across the globe, saw average prices per square metre fall 3.9% to €39,600 in 2020.

There was a slightly steeper decline in transaction numbers in 2020, down 11% compared to 2019, though this does vary by property size. Large properties including four bedroom-plus apartments and villas saw the steepest falls in transactions, down 38% and 53% respectively. Travel restrictions worldwide have made property purchases by foreigners more difficult, turning Monaco into a primarily domestic market in 2020 and keeping most foreign buyers from making the big-ticket purchases in Monaco that they’re so known for.

This trend can also be seen when examining transactions by price point. Properties priced below €5 million was the most active price point in the Principality, with transactions down only 6%, compared to falls of 39% for properties priced over €10 million. Transactions for properties less than €5 million account for 71% of the total sales in the Principality, so softer declines at this price point result in less steep declines for Monaco overall.

Price changes in the Principality were more consistent across the property sizes. The falls in transactions at higher price points didn’t translate to equally lower prices, showing that buyers who did purchase were still willing to pay pre-pandemic prices. The slight decline in prices in 2020 of 1.1% is not enough to derail the upward trajectory of prices in Monaco, which have grown over 50% in the last decade.

Prime capital values and prime monthly rents per sqm (ranked by capital values)

LocationPrime Capital Values € per sqmPrime monthly rents € per sqm
Monaco€ 47,600€ 89.00
Hong Kong€ 39,600€ 60.00
New York€ 22,200€ 66.00
Tokyo€ 20,400€ 50.00
Geneva€ 19,100n/a
Shanghai€ 17,400€ 50.00
London€ 17,000€ 34.00
Sydney€ 15,900€ 20.00
Paris€ 15,600€ 37.00
Seoul€ 15,600€ 32.00
Shenzhen€ 14,500€ 19.00
Beijing€ 13,900€ 18.00
San Francisco€ 13,700€ 27.00
Singapore€ 13,600€ 25.00
Source: Savills

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