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Britain suddenly looks a bargain
By Juwai, 01 March 2012
Marita Thurnauer, an expatriate in Hong Kong, last year paid £100,000 (HK$1.2 million) for a two-bedroom flat in Bolton, northern England, drawn by falling property prices in Britain in the wake of Europe's sovereign debt crisis. Peggy Sito reports for South China Morning Post.
February 29, 2012 -- "I could not afford to buy the same size or quality of property in Hong Kong," said Thurnauer, adding that her fellow expatriate friends were also interested in buying property in England.
"I bought the flat as a mid- to long-term investment and expect to make about 5 per cent a year, which I feel is a good return," she said. "I expect property prices to rise again."
London home prices in particular have been on the rise.
According to property listing website Rightmove, British home prices have grown at their fastest pace in the four weeks to mid-February since April 2007. Prices in
London have hit a new record, with a 5 per cent or about £20,000 increase in the average asking price to £427,987.
Historically-low interest rates and the availability of mortgage financing helped stimulat demand for London property, said Susan Haslam, who owns realtor SJ Propert Investment.
"We have had significant interest from Hong Kong-based buyers," said Haslam. "The vast majority are cash buyers who want to invest some of their wealth in UK property. They are taking advantage of the exchange rate and are enjoying returns of about 5 to 6 per cent from rental income."
There is also a growing number of Chinese buyers looking to buy homes in London, Manchester, and Edinburgh to accommodate their children who study at British universities. They spend about £100,000 to £400,000 for homes and generally prefer apartments in modern blocks close to the universities, according to Haslam.
Foreign buyers accounted for more property transactions in prime London areas than British buyers last year, according to property consultant Savills.
Chinese and Pacific Asian buyers now constitute 33 per cent of all new-build buyers, up from just 4 per cent in 2009.
They dominate the new-build sector, especially in the east of City (Docklands) markets, reflecting developers' marketing focus in these areas, according to Savills.
Redrow London is among the British developers who are targeting Chinese buyers.
Last week it organised an exhibition in Hong Kong to market its One Commercial Street project - a mixed-use development with more than 200 residential units and grade A retail and office space that exceed 100,000 sq ft.
Prices start from £330,000 for studio apartments of 379 sq ft, and range upwards to £985,000 for 1,025 sq ft two-bedroom apartments.
Charles Calverley, Redrow's regional director, said he expected buyers from the mainland and Hong Kong to account for about 30 to 35 per cent buyers, and that this trend would grow.
"I think selling One Commercial Street in Hong Kong is a good way to enhance awareness of the project and our brand in China and in Hong Kong," he said.
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