Chinese investors can still currently enjoy house price discounts of 20% due to the weakness of sterling, CB Richard Ellis has revealed. There are now 875,000 millionaires in China and the substantial currency advantage is fuelling interest in the London residential property market.
In 2011, around 5-10% of all London house sales at overseas showcases will be to Chinese buyers and about 25% of those buying at exhibitions will be looking for somewhere to use themselves.
While traditional 'trophy' buyers will continue to focus their attention on prestigious homes in prime central London, an increasing number of Chinese investors are diversifying their interests to include easy-to-manage new-build apartments in regeneration areas like the Olympic zone where transport improvements are imminent.
Jennet Siebrits, Head of Residential Research, CB Richard Ellis, commented: "The strength of Chinese investors offers a complete contrast to the state of the UK and there is currently little home grown competition. Chinese buyers helped drive property prices in the super prime markets last year, but 2011 might be the year when the rest of the London market catches up as appetite grows for good quality accommodation in well-connected locations.
"It is worth noting that around 25% of those buying at residential exhibitions are looking for somewhere to use themselves. Buyers who are not millionaires or real estate professionals are now looking to buy in London, predominantly with their children in mind for study or work.
"Cooling measures introduced by the Chinese government to curtail the country's domestic property bubble are likely to promote further overseas investment in cities like London. The government has already introduced a tax on property purchases in some of China's major cities, which is encouraging potential purchasers to look elsewhere."
Source: CB Richard Ellis