Greece

25 August 2013, 07:16 PM Greek, Nigerian and French buyers are joining wealthy Chinese, Russian and Middle Easterners targeting European residential property, in particular new luxury developments in central London. In southern Europe meanwhile, the offer of residency permits is attracting new capital, particularly from Asia, to support suffering housing markets and economies. Foreign investors have snapped up 65-70% of new homes in prime London locations over the last two years, according to property consultancy Chesterton Humberts. That appetite, primarily from China, Russia and Mid East – drawn by the capital’s shopping and rich lifestyle – has helped push new-build home prices up by 56.3% since the start of 2009. The buyers are however increasingly targeting the homes for investment, and are now being joined by buyers from Greece, Nigeria and France looking to protect their wealth from taxes and political uncertainty in their home countries. International buyers spent £2.2bn on new luxury London residential last year, a figure that Samuel Warren, Chesterton Humberts’ head of international residential developments, expects will be exceeded this year. Large new projects, such as the redevelopment of Battersea power station, are helping drive the market. “With demand for prime new build properties set to remain robust and new supply struggling to keep up, we expect investment volumes will be higher this year than last. The relative weakness of sterling means that many overseas buyers can achieve discounts on purchase price whilst acquiring an asset that will almost certainly appreciate considerably .. and which they will have little difficulty in selling.” However, political opposition to London ‘buy-to-leave’ properties is growing, amid fears that workers on lower wages will be pushed out of central districts, and local economies will suffer. Barbara Grahame, Labour’s planning spokesperson for Westminster borough council, said parts of Westminster are turning in to a ghost town. “More ‘buy-to-leave’ luxury apartments are being built and sold as investments for overseas buyers who rarely live there, sucking the life out the West End and contributing nothing to the local community or local economy.” Around Europe, the focus on London as a safe haven comes as some troubled nations ease residency requirements to attract wealthy foreigners to buy property and re-stimulate their housing markets and economies. Spain changed legislation in July to grant residency visas to non-EU nationals spending more than €500,000 on property, a move that grants them free access across the European Union. It follows Portugal, which has also set the same threshold, and Greece and Cyprus at a minimum €250,000 and €300,000 respectively. International investment in Spanish property grew to almost €5.5bn in 2012, according to the Bank of Spain, driven by buyers from Scandinavia and Russia. The change in legislation is expected to drive more interest from Asia and push investment levels past 2012. But some commentators offer stark predictions for the country’s housing market. Angel Serrano, the head of Madrid-based property consultancy Aguirre Newman, said recently residential property prices need to fall by another 20%-25% for housing to become affordable for Spanish workers. pie Continue reading →