Comparing the London Property Market With the Rest of the World

There are often articles written about the UK property market: from the perspective of owner-occupiers, British property investors and overseas buyers. And these different angles all tell a different story so it is sometimes difficult to see the bigger picture of where the UK property market is at now and where it is likely to be heading in the years to come. Even if you are not an investor but have bought, or are considering buying, a home for yourself and your family to live in it is still useful to know how the market is faring, after all your home is also an investment or, at least, traditionally this has been so in the UK.

But not all countries have the same type of market; in some you would not expect to increase the value of your home for the next generation let alone in a few years as UK buyers had come to expect before the current economic crisis. So sometimes it is interesting to look at our own market in comparison with other property landscapes around the world; those of us with a positive outlook may find much to reinforce that view and those with a negative outlook for the future of property prices may find something to make that negative view a little less bleak.

It is hard to compare like with like across countries because even within a single country there are so many different types of property. The low cost one or two-bedroom apartments or small houses for first time buyers right through family homes, executive homes up to the prime London property market that has become exclusively for high net worth individuals. So let's focus on just one aspect: prime property in London and the Home Counties, and compare this high net-worth landscape to similar properties in other countries across the globe.

There are a range of professional reports that can help with this comparison (one is the Prime Global Cities Index from Knight Frank) which presentsan indication of values and trends across different countries and places London's property performance in a global context. London's prime property market, unlike other areas of the UK property market, has been booming over the past few years and looks set to continue with this trend as investors are showing a preference for the UK over the Eurozone, but how does it compare to other major cities outside Europe?

London has in recent years featured in the top five cities worldwide for percentage annual increase in prime property prices and is typically ahead of all other European cities although Zurich and Moscow are close rivals. New York (specifically Manhattan) has always been a close rival but other cities such as Miami, Kakarta and Nairobi are also strong contemders for high annual price increases of prime property.

Prime property is a not an assured investment everywhere in the world as many major cities such as Sydney and Kuala Lumpur have shown significant falls in property values recently. And in Europe, Paris, Madrid and Geneva have also seen decreases of between four and five per cent. These decreases give an indication of how well London's high-end market is performing.

There still appears to be a sufficient level of demand for high-end London property from both cash buyers and those choosing to finance a purchase with a large mortgage, typically million pound mortgages or more. Economic uncertainty in Spain, Greece and Italy continues to mean London is seen as a safe haven for European investors.

at 12:50 AM
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