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Market Comment


There is growing evidence to suggest that the Prime Central London market may have bottomed out following the snap election, the ongoing uncertainty surrounding Brexit, the Stamp Duty increases and rising interest rates. Activity has picked up indicating that the market is staging a modest recovery – Lonres data shows a 5% year on year increase in sales volumes in the six months to November 2017.
Overseas buyers continue to favour Prime Central London as a safe haven being a global hub for finance, culture, education and tourism. Research from London Central Portfolio shows that 36% of sales went to buyers from The Far East, 22% from India (an increase from 5% two years ago) and 21% from the Middle East in the period from August 2016 – August 2017, as exchange rates following the Brexit vote remain favourable for international investors who are also attracted by the discounted prices.
Rents in Prime Central London have fallen by 3.1% over the course of 2017, however the rental market has remained active driven by demand for smaller properties and at the top end where tenants are choosing to rent instead of buying due to high taxation and the uncertainty surrounding Brexit. Affluent students are also a driving force in demand for top end properties.

Residential property prices in Dubai have shown signs of stabilising and is likely to see a return to growth in 2018 according to Knight Frank; in the nine months to September 2017 prime transaction volumes increased by 6% driven by demand from international buyers from India, Pakistan, Saudi Arabia and the UK. Government spending on infrastructure will continue ahead of Expo 2020 which will encourage GDP growth in 2018 which in turn is likely to drive demand higher.

“We have one of the most positive real estate climates I’ve seen for some time,” according to Alexander Kraft, chief executive of Sotheby’s International Realty in Monaco. The Macron effect has encouraged interest from UK, European, US and Middle Eastern buyers and the outlook for 2018 is bullish against a background of improved economic activity coupled with record low interest rates.