Chinese invest heavily in London property

Chinese invest heavily in London property

Buyers from mainland China and Hong Kong are ignoring the cooling of London’s property market as they continue to invest heavily in luxury real estate in Britain’s capital.

Chinese real estate investors are snapping up luxury property in areas such as London’s fashionable Knightsbridge and Canary Wharfe.

Naomi Minegishi, a twenty one year old Japanese woman, who lived in China for ten years, is a property broker in London.

When she was hired, Naomi had no previous real estate experience and was recruited because of her fluency in Mandarin.  Recently, she has sold four, three-bedroom apartments in a new development for £320,000 ($500,000 USD) per unit – all of them to different Chinese investors.

“Chinese clients are a dream.  They are wealthy, they pay in cash, and they’re looking for good value” she was quoted as saying.

In several up-market areas of London, Chinese investors have already become the main buyers of luxury property; replacing buyers from Russia and the Middle East.

In fact, the Chinese now account for five percent of all London property purchased by foreigners valued between £500,000 ($804,500 USD) and £1 million ($1.6 million USD).

British government figures also show that there were 115,000 Chinese people living in London by 2007, compared to only 80,000 in 2001.

The Chinese, unlike their Russian and Middle Eastern counterparts, are not buying London real estate to live in – most are looking for investments in a market they consider far more stable than their own.

This shift in nationality of buyers has resulted in brokers being eager to hire Mandarin and Cantonese speakers – some property developers have even omitted the number four from their numbering schemes, as it is considered unlucky in Chinese culture.

Mathhew Tack, director at Hampton’s London real estate agency commented; “Most developers in London are including China in their marketing efforts, they’d be silly not to.”

The increase in the number of buyers from Asia is a clear sign of the shift in wealth to Asian countries, including mainland China.

Most countries in Asia have recovered much faster from the global economic downturn as they are free of the huge levels of debt Western households and governments are now facing.

London remains popular due to Britain’s relaxed restrictions on foreigners owning real estate.

Culturally, the Chinese understand the importance of education and many parents hope to send their children to a top university.  Britain is a popular choice as far more foreign students are admitted to British universities than to those in the USA.

Figures from the British Universities and Colleges Admissions Service show the number of Chinese students increased from 867 to 948 last year – a nine percent rise within twelve months.

One mainland Chinese investor who owns property in London said; “I bought a flat for my daughter’s use when she was studying in London and other flats I have rented out or sold.   The U.K. traditionally has a very good legal structure with good law and order.  That, together with the city’s financial institutions and the British people’s love for owning their own homes, makes the property market extremely attractive.”

Real estate brokers who cater for Chinese investors say it is not certain whether and when the demand from China will start to fall although there is no indication that this will happen soon.

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