Savills reports claim the commercial real estate market demand exceeded post-referendum as it is one of the prime global cities, where investors from Asia, the US, and the Middle East are buying. The report claim London real estate markets offer liquidity in the condition of a buy or sell, and compared to other cities in Europe, London offers better returns, of over 4 percent in the city and 3.25 percent in West End. The north and the East Midlands are emerging as new investment hubs where the sale of homes worth over a million pounds increased 67 percent in 2018 H1 (from 24 to 40) as per the data released by Lloyds Bank Private Banking.
A 100 percent increase in the sale of million pound plus homes in Wales in 2018 H1 was reported and the sale of million pound-plus homes in London declined from 3940 (in H1 2017) to 3628 in H1 2018. In the last decade, the highest numbers of million pound-plus homes were sold in London in 2014 H1 i.e. 4371. Now buyers are looking for alternative locations such as East Midlands and Wales, mostly, due to improved commuting links to these cities to the capital.
Comparing Global Real Estate Markets
Changes in the property market regulations, taxes, and the rise in interest rates led to rise in the cost of finance in the UK. The new prime supply of homes in key European cities is attracting investors to Berlin, Paris, and Madrid, where it is expected the prices will grow at the rate of 6 percent in the year 2019. As per Knight Frank international real estate global forecasts, the prices in some of the European cities will grow at the rate of 6 percent, in Miami 5 percent, Vancouver 3 percent, London, Geneva, and Melbourne 1 percent, while, the rate will remain flat in Singapore and New York. Some of the cities having the highest growth in rates in last year such as Singapore are expected to see a drop of 10 percent and Mumbai will see a fall in price by 5 percent.
Dubai price is also predicted to reduce by 2.4 percent. CEO of Savills Middle East, Steve Morgan claimed the real estate price in Dubai may hit a low by 5 to 10 percent in 2019. Prices declined in key cities in many European and Asian countries, mostly due to affordability issues. Unaffordability is affecting UK housing markets and even the tourism sectors, in these countries. In Dubai, supply is in excess and oil prices are softening. The government is planning to reduce the cost of the transaction to prevent stagnation and decline in the real estate sector.
UK exit from Europe is now just a matter of months and many buyers and sellers in the country are waiting to see the changes post-referendum. Uncertainty and unaffordability in residential property had made it difficult for the first time buyers to invest in real estate, now despite rising house price; people are looking for weakness in prices to finalize the transaction.
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