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Chinese Investors Flock To London To Buy Real Estate

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http://www.nytimes.com/2010/09/18/business/global/18chinareal.html?_r=1&ref=business

LONDON — Naomi Minegishi, 21, a Japanese woman who lived in China for 10 years, recently took a job with the London property broker Felicity J Lord.

Ms. Minegishi was hired not for her experience in real estate sales — she is studying management at a London university — but for her language ability. She is fluent in Mandarin, an increasingly valuable skill in London’s residential real estate market.

With her help, the agency recently sold four three-bedroom apartments in a new development for £320,000, about $500,000, each to a different Chinese buyer and solely on the basis of photos and floor plans. The new construction is close to the Olympic stadium, and the investors are betting that real estate prices will rise before the Games in 2012.

Chinese clients are a dream, Ms. Minegishi said. “They are wealthy, they pay in cash, and they’re looking for good value.”

Chinese citizens require approval from their local authorities to invest more than the equivalent of $50,000 a year overseas. But many wealthy Chinese elude the restrictions with help from trust funds and foreign bank accounts, real estate brokers say.

The London property market might have shown signs of cooling recently, but investors from mainland China and Hong Kong are busier than ever — bidding, for example, on luxury apartments in the fashionable Knightsbridge district down the road from Harrods department store and on new homes near the Canary Wharf financial district.

In some parts of London, mainland Chinese investors have already replaced those from Russia and the Middle East as the busiest real estate buyers with deep pockets, looking for trophy assets and pushing up prices, some brokers say.

Buyers from mainland China are a tiny portion of purchasers of high-end real estate in London, accounting for 5 percent of all purchases by foreigners of London properties valued from £500,000 to £1 million this year. But they are a growing presence. They accounted for less than 1 percent of purchases in that price range last year, according to Savills, a real estate agency.

Europeans still make up the largest portion, Savills says, although it does not break down buyers by country.

Unlike clients from Russia and the Middle East, however, few Chinese buyers are looking for London apartments to live in themselves. A majority of them are seeking investments in a real estate market they perceive as more stable than their own and are planning to receive steady rental income for years, Ms. Minegishi said.

So the Chinese are buying off plan.

Is there an inside track type company operating in China?

The UK housing market more stable than China's!

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I think this is very true , just started working in an estate agent's near Canary Wharf , mainly lettings but a few sales as well . Wealthy foreigners are the biggest coustomers by far . They are going to price out the ordinary Londoner.

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"The new construction is close to the Olympic stadium, and the investors are betting that real estate prices will rise before the Games in 2012."

But why should they do that?

This isn't like Wimbledon where the tennis players come every year, the Olympics are a one off thing and is anyone going to buy a flat there to see a single week of athletics events in the stadium.

All of which will be on TV anyway.

So they're buying a flat in the hope that they can sell it at a profit in less than two years?

And if they don't they'll be stuck with it afterwards as the whole area decays back into a craphole.

And these are meant to be top investors?

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"The new construction is close to the Olympic stadium, and the investors are betting that real estate prices will rise before the Games in 2012."

But why should they do that?

This isn't like Wimbledon where the tennis players come every year, the Olympics are a one off thing and is anyone going to buy a flat there to see a single week of athletics events in the stadium.

All of which will be on TV anyway.

So they're buying a flat in the hope that they can sell it at a profit in less than two years?

And if they don't they'll be stuck with it afterwards as the whole area decays back into a craphole.

And these are meant to be top investors?

If they have bought cash which many do , then any rent after the games will be theirs. There will be rent rolling in due to the very strong demand for london property and the lack of it.

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LOL, I was thinking about the rash of foreign buyers - a crapped out sterling didn;t tick all the boxes, but the Olympics effect OMG the ******ing deluded dolts if they are buying on the basis of that.

Also thinking about the London effect - newly welthy Londonders moving elsewhere to the country having sold up their pads to buy up large houses in the provicences, well there wil come a time when all this foreign owned London propoerty is going to choke that little number off severely, let alone when the foreign owners deicde they want to cash in their "gains".

London moving to total bubble territory.

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Nah the problem is China is kind of unfair, in that if you get too rich a government official may decide he wants it and will take it from you. Its why you get loads of people with uber amounts of money with little confidence in RMB changing them into hard assets outside China in case it all blows up they have something the CCP can't touch. Same thing with australia too.

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London moving to total bubble territory.

I would have agreed with you on that untill recently , but form what i have seen in the last few weeks I have had to change my mind.

For many reasons the world and his wife want to be in London and the rich one's are coming in their droves.

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Nah the problem is China is kind of unfair, in that if you get too rich a government official may decide he wants it and will take it from you. Its why you get loads of people with uber amounts of money with little confidence in RMB changing them into hard assets outside China in case it all blows up they have something the CCP can't touch. Same thing with australia too.

And many other not so stable countries , that is why they all come here , a wealthy Nigerian once said to me any one in Nigeria with money gets as much of it as possible out of the country.

We have a stable and mature property market . Prices can and do rise and fall , but we do not change the goal post's and take people's asset's away from them , so they are happy to invest their money here knowing that it is safe.

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I would have agreed with you on that untill recently , but form what i have seen in the last few weeks I have had to change my mind.

For many reasons the world and his wife want to be in London and the rich one's are coming in their droves.

thats exactly what a bubble is, peak positive sentiment

Id have thought the tech extreme positive sentiment in 2000 and the general housing extreme positive sentiment in 07, two of the biggest peaks in history in less than 10 years would have taught people that extreme positive sentiment is a requirement for a top but people still seem to have the memory of a fish when trying to understand the inverse link between sentiment and markets peaks

Edited by Tamara De Lempicka

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Doesn't one need to be a UK resident, tax registered et al to actually purchase property here?.. and if not why not?

Al Fayed managed it for decades.

There are a few restrictions here and there, for instance immigrants who aren't settled can't buy businesses, s they cheat they go home get married bring the wife who buys a business employs the husband so he can keep on the clock and transfer his job to this business and bang they can own a business going round the restrictions.

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Al Fayed managed it for decades.

There are a few restrictions here and there, for instance immigrants who aren't settled can't buy businesses, s they cheat they go home get married bring the wife who buys a business employs the husband so he can keep on the clock and transfer his job to this business and bang they can own a business going round the restrictions.

Well, that just illustrates what a total horses derrier the whole system is.

What is the point of playing the game?

Edited by Flatdog

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thats exactly what a bubble is, peak positive sentiment

Id have thought the tech extreme positive sentiment in 2000 and the general housing extreme positive sentiment, two of the biggest peaks in history in less than 10 years would have taught people that extreme positive sentiment is a requirement for a top but people still seem to have the memory of a fish when trying to understand the link between sentiment and markets

A bubble is something that burst's. As you say after peak positive sentiment. How do you , I or anyone else know where the peak of positive sentiment is.

If people have the money to buy something and there are more people to buy than there are units of goods prices will keep rising . Property accross the country might have maxed out on price a few years back and demand is not now there due to mortgages not being avaliable. However if cash people still want to buy and there are more and more of them coming to London the market might not be at peak , it could just be moving up as it always will .

The new build flats in places like Leeds, Manchester, Liverpool , Newcastle and other major cities might be sitting there empty but people are out bidding each other to rent and buy them in East London.

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Doesn't one need to be a UK resident, tax registered et al to actually purchase property here?.. and if not why not?

nope. not at all, i know i could buy without being resident and pay no tax in the uk,if i rented it via double taxation, loads of countries restrict this but not the uk, its a huge part of the appeal

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A bubble is something that burst's. As you say after peak positive sentiment. How do you , I or anyone else know where the peak of positive sentiment is.

If people have the money to buy something and there are more people to buy than there are units of goods prices will keep rising . Property accross the country might have maxed out on price a few years back and demand is not now there due to mortgages not being avaliable. However if cash people still want to buy and there are more and more of them coming to London the market might not be at peak , it could just be moving up as it always will .

The new build flats in places like Leeds, Manchester, Liverpool , Newcastle and other major cities might be sitting there empty but people are out bidding each other to rent and buy them in East London.

you just said yourself, the world and their wife are coming and buying is happening in droves, that is clearly a peak description

The more frenzied the buying the closer buying is to exhaustion, it wasnt me who described the above, if youd have said theres been a bit of interest then id not have highlighted it being peak behaviour

Edited by Tamara De Lempicka

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http://www.nytimes.com/2010/09/18/business/global/18chinareal.html?_r=1&ref=business

So the Chinese are buying off plan.

Is there an inside track type company operating in China?

The UK housing market more stable than China's!

...the Chinese like punts ...what is the future for the Olympic Village area after the Olympics....what do they anticipate...?... :rolleyes:

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Miko,

Can't argue with those points- other than the stability part (at least in terms of pricing). This bubble was already huge - seemingly even bigger, more distorted, less linked to any economic rality Sooner or later Lodon will choke on this money ass it drives work and companies abroad. Total insanity.

As for stability - look at the cultural dynamics of the capital and sooner or later someting is going to break, also prime terrorist target and with almost zero effective border controls I wouldn't bet against someting really nasty going down at some point in the future. Then there is the currency risk.

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you just said yourself, the world and their wife are coming and buying is happening in droves, that is clearly a peak description

The more frenzied the buying the closer buying is to exhaustion, it wasnt me who described the above, if youd have said theres been a bit of interest then id not have highlighted it being peak behaviour

No your wrong,

My discription of droves does not clearly describe a peak situation , it describes a numbers situation. There are many of them.

I said the world and his wife want to come to london for various reasons. Just like they come and buy a coffee they come and buy a property.

They are cash buyers not looking to buy and turn the property for a quick buck but to keep it long term. With far more global rich than empty properties instead of a price peak and bubble it could just be a market moving upwards in relation to the money avaliable to purchase it. Might look like a bubble to a priced out Londoner who works his **** off and gets paid £40k but just a normal market to the global rich.

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No your wrong,

My discription of droves does not clearly describe a peak situation , it describes a numbers situation. There are many of them.

I said the world and his wife want to come to london for various reasons. Just like they come and buy a coffee they come and buy a property.

They are cash buyers not looking to buy and turn the property for a quick buck but to keep it long term. With far more global rich than empty properties instead of a price peak and bubble it could just be a market moving upwards in relation to the money avaliable to purchase it. Might look like a bubble to a priced out Londoner who works his **** off and gets paid £40k but just a normal market to the global rich.

the price is immaterial could be an average price of a tenner or a million, the world and his wife is emotive, it does not describe a normal situation, i have no idea whats happening in london in estate agents i was just highlighting your choice of words did not describe a normal market, bog standard markets do not attract the world and his wife in droves, only tops do that

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Miko,

Can't argue with those points- other than the stability part (at least in terms of pricing). This bubble was already huge - seemingly even bigger, more distorted, less linked to any economic rality Sooner or later Lodon will choke on this money ass it drives work and companies abroad. Total insanity.

As for stability - look at the cultural dynamics of the capital and sooner or later someting is going to break, also prime terrorist target and with almost zero effective border controls I wouldn't bet against someting really nasty going down at some point in the future. Then there is the currency risk.

And to contidict myself i have to agree with you as well.

The big problem is the cultural and economic dynamics that is very worring. The average brit is being priced out.

This week I spoke to two young women both married with no children and husbands all working in ordinary jobs. They are paying £250 per week for tiny one bed flats. Two years ago these flats would have been £200 a week , how much in another few years ?

When will these women be priced out and have to move out of London ? how much will they pay in say essex ? competing with the other priced out of London youngesters. How can these women ever start a familiy ? a few decades ago they would have got council flats or houses at reasonable rent's but these are no more.

Things like this worrie me and I do not know where it will end , however I still think with the global rich the london market still has a long way to run.

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the price is immaterial could be an average price of a tenner or a million, the world and his wife is emotive, it does not describe a normal situation, i have no idea whats happening in london in estate agents i was just highlighting your choice of words did not describe a normal market, bog standard markets do not attract the world and his wife in droves, only tops do that

...to control Australians being priced out of the market the Government there put restrictions on non residents buying including the Chinese who were fueling the bubble in certain Cities ....these people will be turning elsewhere to invest where there are less controls including London and are / will price locals out of the market.... :rolleyes:

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No your wrong,

My discription of droves does not clearly describe a peak situation , it describes a numbers situation. There are many of them.

I said the world and his wife want to come to london for various reasons. Just like they come and buy a coffee they come and buy a property.

They are cash buyers not looking to buy and turn the property for a quick buck but to keep it long term. With far more global rich than empty properties instead of a price peak and bubble it could just be a market moving upwards in relation to the money avaliable to purchase it. Might look like a bubble to a priced out Londoner who works his **** off and gets paid £40k but just a normal market to the global rich.

If they are buying off plan have they even been to London - do they know what they are actually buying into - culture shock for some, investment - who is going to pay the rent - I mean that in a global sense, there is nothing done in the caital that cannot be done elsehwere and there are many things that are done (that you cannot get away with as easily elsewhere) that are going to be stamped on because I very much doubt there will be any stomach in the rest of the Eurozone for another screw up of this magnitude again. The economics of expensive empty properties is not going to work, the rest will fall apart, the captial needs huge sums being spent in it to keep the whole lot churning over or else the whole lot crumbles under the weight of its huge costs base.

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...to control Australians being priced out of the market the Government there put restrictions on non residents buying including the Chinese who were fueling the bubble in certain Cities ....these people will be turning elsewhere to invest where there are less controls including London and are / will price locals out of the market.... :rolleyes:

absolutely, as i said iearlier i specifically checked when i left the uk so i know i could buy despite being non res, but they are buying based on current conditions and rules, as you say aus changed the rules through neccesity, if it becomes politically sensitive and a problem in london they will change there too, rules and laws are made for changing and they constantly do.

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the price is immaterial could be an average price of a tenner or a million, the world and his wife is emotive, it does not describe a normal situation, i have no idea whats happening in london in estate agents i was just highlighting your choice of words did not describe a normal market, bog standard markets do not attract the world and his wife in droves, only tops do that

As I said London attracts the world and his wife ( not emotive just a fact ) . Never said they were attracted to the property market said they were attracted to London for various reasons.

However due to them coming here and then deciding to buy property for cash as they have much of it the market rises . Does not constitute a bubble a bubble can not be sustained . With all their money the property market could be sustained.

Said it yourself "you have no idear what's happening in London estate agents " therefore you can not say whether it is a bubble or not . Might not be a normal market in most of the country but for London a city attracting vast numbers of global rich it is a normal market.

Again you said it yourself " price is immaterial " yes it is if they have the cash . A cash market will always be more sustainable than a high leaveraged mortgage market.

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  • 149 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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