Property Investment: The Rising Power of the Asian Investor

Asian investors are slowly becoming one of the superpowers of the world property market. As the rest of the world suffered as a result of the financial crisis...

Asian investors are slowly becoming one of the superpowers of the world property market. As the rest of the world suffered as a result of the financial crisis that struck property prices in the likes of the Middle East, Europe and North America, certain Asian economies such as China continued to grow, and it has left a growing number of people from these nations looking to get themselves a slice of the property market overseas. One of the major nations they have begun to move into has been the UK, with properties in London and further afield being seen as something as a safe haven for their investments, allowing them the chance to make decent levels of profit from their outlay.

UK a main market for Asian investors

There are a number of different areas of the UK in which Asian investors are starting to become a major force. Examples of this include the revamping of Battersea Power Station into luxury flats, which is a Malaysian owned project, and the refurbishment of Crystal Palace, which has Chinese investors backing it. At the moment, some 15 per cent of all the sold properties in London alone are being picked up by overseas buyers, and alongside Spanish investors, those coming from Asia are among the most prominent.

In prime Central London, the number of foreign investors is even larger, with an estimate from Knight Frank suggesting that three-quarters of new-build properties in this area are purchased by those from other countries. It added that some one-in-six of these properties are sold to those from Asia, with Singapore-based buyers taking up a large portion of these sales. 

Chinese buyers are also starting to become some of the most active in London as well, with a recent report from W.A.Ellis stating that those from south-east Asia are becoming "frantic" for property in the centre of the city. In the last year, the report stated, Chinese investors had managed to plough some £3.5 billion into the London property market. "There’s a real confidence in the London real estate market. Investors seem "frantic" to buy. The liberalisation of the RMB has helped immensely and has, in part, been responsible for broadening the profile of buyers," said Lucy Morton, senior partner with the company.

The reasons for these buyers coming to London is hardly a secret either, with Knight Frank stating that the last year alone has seen prices in the centre of the capital's prime market rising by an average of 11 per cent, meaning that investors are able to enjoy a fantastic level of return on their outlay through both the letting of their properties and the substantial capital gains that they can make when they come to sell. And it's not just a short-term solution either, with the latest predictions stating that London property should rise in price by a further quarter within the next five years.

However, there's also another new and exciting area enticing more buyers from Asia at the moment - student properties. According to a report published recently from Select Property, more than three quarters of a new student real estate development in Manchester was snapped up in less than a month, with the strong level of demand and interest from the Far East playing a major part in the success of the development to date. If nothing else, this shows that Asian investors are now so confident about the market in the UK that they are prepared to move away from both London and the safe prime property sectors. 

Trends seen worldwide

While the UK is one of the most popular areas in the world for Asian investors, though, it is not the only area that they are looking to spend in, with the trend being seen all over the globe. 

Brookes and Co reports that the number of investors from Hong Kong coming to Florida for the fresh air and the environmental benefits has been substantial. Meanwhile, Brazil has become a hotspot thanks to the fact that political unrest and low currency rates have made for some really low property deals. Finally, in Australia, there has been a huge rise in investors from overseas, with the nation becoming the second most popular spot for buying real estate for those with money from the likes of Malaysia, Singapore and India.

- Wednesday 26 March 2014

*This page is provided for information purposes only and should not be construed as offering advice. Flex Profit Hub is not licensed to give financial advice and all information provided by Flex Profit Hub regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.