Foreigners Bought Half Of All London Homes Selling For Over £1 Million

Tyler Durden's picture




 

Actually, according to the first detailed estimate of international purchase activity in London by Knight Frank, the percentage of all central London homes that sold for more than 1 million pounds to foreigners in the 12 months through June 2013, was 49% to be exact. And as we showed yesterday when we put China's loan creation in the context of US and Japanese QE, keeping in mind the use of proceeds of all this newly created inside money has to ultimately go somewhere - that somewhere in this case being London and other global luxury real estate, said percentage is only going to get higher. Especially when one adds Russian, the middle east and other various regions whose oligarchs are desperate to park their money in "safe" havens.

Some other findings from the Knight Frank report:

  • Over the 12 months to June 2013, 49% of all £1m+ sales in prime central London went to foreign buyers by nationality...
  • ...however only 28% of buyers were non-resident in the UK
  • Over the two years to June 2013 51% of new-build purchases in the prime central London market were by UK residents...
  • ...across the remainder of inner London the portion was 80%...
  • ...and across outer London 93% of sales were to UK residents
  • Our estimate is that over the past two years 85% to 90% of all new-build purchases in Greater London have been to UK residents

Just as notable - foreigners love new construction: in the two years to June 2013, 69% of prime central London new-build purchases were to foreign buyers by nationality.

And here, a tangent: those two main instances of Emerging Market tremors that we have seen over the past year as a result of QE - well, let's just say that they better normalize soon, and funds resume flowing toward the EMs rather than out of them or else, the London (first) and soon after all other luxury residential markets get it...

Source: Knight Frank

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Sun, 02/16/2014 - 14:37 | 4442430 kurt
kurt's picture

Max Kaiser was talking about this. It seems they buy them, don't live in them, let the maintenance go to hell and that the neighborhood "is kind of a scarey place."

If I was super-dooper rich I'd like to flush my money down a rat hole too!

Sun, 02/16/2014 - 14:50 | 4442457 Pool Shark
Pool Shark's picture

 

 

It's Déjà vu all over again.

 Anyone remember the Japanese buying up all the American real estate in the late 1980's.

How did that work out for them? 

[P.S.: how much sense does it make to plow your fortune into a non-portable asset, knowing the western governments are going bankrupt? Just paint a target on all those houses. If you think you own it; stop paying the property taxes and see what happens...]

 

Sun, 02/16/2014 - 15:48 | 4442602 kaiserhoff
kaiserhoff's picture

Two points.

 

1 Hot Money.

2 Foreigners always buy in at the top.

Sun, 02/16/2014 - 15:56 | 4442620 DeadFred
DeadFred's picture

I hope they like the rain

Sun, 02/16/2014 - 15:58 | 4442622 CPL
CPL's picture

http://www.youtube.com/watch?v=D1ZYhVpdXbQ

They can sing and dance in it, form bucket brigades in tempo and rhythm.

Sun, 02/16/2014 - 16:12 | 4442659 Caviar Emptor
Caviar Emptor's picture

Good example of how biflation works: QE-rich buy up local RE and drive up prices on nearly everything even as local real GDP flatlines and real incomes decline.

Sun, 02/16/2014 - 17:14 | 4442805 Four chan
Four chan's picture

suckers.

Sun, 02/16/2014 - 17:28 | 4442842 Hulk
Hulk's picture

your comment and avatar are a curious combination !!!

Sun, 02/16/2014 - 16:31 | 4442699 market le pew
market le pew's picture

We've been living in the rain now for three years and thank you very much, we're off to a place with higher tax rates, compensated by much better property prices, much better climate and much better food at afforadble prices. Sounds like a fair deal to me. Until now this wasn't an option but now that the kids have left the nest it's a no brainer.

Sun, 02/16/2014 - 15:49 | 4442605 Rafferty
Rafferty's picture

A ploy popular with Indian and Pakistani 'businessmen' was to buy a house in a very expensive London street.  Then fill the house with dozens of sub-continental families.  As the wealthy locals begin to flee the sale price goes down precipitously and the 'businessmen' buy them up.  When all the wealthy have fled and the whole street has been purchased for buttons the 'businessman' gives the tenants an offer they can't refuse, and the area is ready for gentrification again.

Sun, 02/16/2014 - 19:11 | 4443152 Its_the_economy...
Its_the_economy_stupid's picture

also known as "block busting".

Sun, 02/16/2014 - 15:32 | 4442570 Mr Pink
Mr Pink's picture

Keiser claimed that the property taxes were less than storage costs on physical gold and they are just looking to turn their cash into assets

Sun, 02/16/2014 - 16:07 | 4442647 linrom
linrom's picture

That show was Max at his best.

Sun, 02/16/2014 - 16:32 | 4442701 tocointhephrase
tocointhephrase's picture

Yeah, just before the one where he mined his new crypto currency max coin. Obviously it is down hill from here on in

Sun, 02/16/2014 - 16:44 | 4442735 kaiserhoff
kaiserhoff's picture

Who was the drunk chick who had a crush on Max, anyone remember?

Sun, 02/16/2014 - 21:04 | 4443474 rustymason
rustymason's picture

Stacy.

Sun, 02/16/2014 - 16:05 | 4442640 Wile-E-Coyote
Wile-E-Coyote's picture

Yeap and here is the story. Rich people buying houses in London and letting them rot.

http://www.theguardian.com/society/2014/jan/31/inside-london-billionaires-row-derelict-mansions-hampstead

Mon, 02/17/2014 - 00:00 | 4444080 Davalicious
Davalicious's picture

The 1952 group libel act wasn't written by the British. A certain people didn't want to be outed as a criminal cartel. Ditto for the anti-racist laws in white countries. Guess who pushed the 1965 immigration act, which abolished the national origins formula, for the USA. Written and pushed by the same group. They undermine the "natives" and bring in outsiders to keep us busy fighting amongst ourselves while they run the show.

According to ZH policy, you can't post anything which libels a group. Lenin spoke Yiddish at home. Stalin was married to a Jewish woman and his father in law headed the secret police in Bolshevik Russia. Jewish capitalist Jacob Schiff sent the Jewish Bolsheviks $20 million. They made it a crime to mention the fact that the country had been taken over by a hostile alien race. Of course they did. You can find honest assesments of what happened in Russia in contemporary secret service reports which are available in the library of congress. They aren't common knowledge because you know who controls the media.

Sun, 02/16/2014 - 14:39 | 4442439 bigdumbnugly
bigdumbnugly's picture

ich bin ein londoner?

or maybe how do you say that in arabic?

Sun, 02/16/2014 - 15:22 | 4442553 Solarman
Solarman's picture

Allahu Akbar?

Sun, 02/16/2014 - 14:41 | 4442448 Sudden Debt
Sudden Debt's picture

what I don't understand is why a city where it rains 300 days a year is so popular.

And their food...

I mean... I'd rather live in Marseille for example.

Sun, 02/16/2014 - 14:59 | 4442488 TheBoyPlunger
TheBoyPlunger's picture

I spent a few days in London. I'll never go back.

Sun, 02/16/2014 - 15:03 | 4442496 Mad_max
Mad_max's picture

Please refer to it by its proper name - Londonistan.

Feel the enrichment.

Sun, 02/16/2014 - 15:13 | 4442530 max2205
max2205's picture

London latitude is up there near alaska....when the gulf stream changes that's where they will store meat

Sun, 02/16/2014 - 16:12 | 4442658 linrom
linrom's picture

Now there is speculation that jet stream flow is also changing. The combined effects of gulf stream and jet stream changes could turn England to frozen tundra which coincidentally is thawing out due to warmer temperatures.

Sun, 02/16/2014 - 17:08 | 4442787 TruthInSunshine
TruthInSunshine's picture

London today has some of the best restaurants in the world. All the financial sector money created a demand for the best food at any price, since the entirety of the British banking sector is essentially taxpayer subsidized (as is America's banking sector and as is, especially, Wall Street on Manhattan).

I have been to London a dozen times in the last 8 years, sometimes for as long as a month. The London club scene is hopping, powder cocaine is EVERYWHERE, and there are 150,000 USD to 300,000 USD cars/SUVs everywhere.

The city is essentially vertical, so that anyone who wants to work near a London located business is going to pay nosebleed prices for a glorified apartment with a doorman, like Manhattan, only probably 1 1/2 to 2x as much per square meter.

Oh, and London has a booming defense industry/arms trade. At high end cocktail parties, the big money people either work in finance, real estate development, biotech or "arms/munitions."

The further you great from the corrupt & taxpayer-siphoning city center of London, the further depressing things become, and the further beaten down & "surrendered" to their "bad luck" and "bad lot in life" people become in to e and attitude (Britain has historically been something of lucky sperm club/caste-lite society; the opposite of America's Horaratio Algier bootstrap mythical one).

I hate London because it not only reflects every disgusting, incestuous, taxpayer sucking thing that Wall Street/NYC do, but more so, as it's the original model of how a private bank cartel literally buys off & deeply captures an allegedly representative form of "elected" government.

Sun, 02/16/2014 - 17:26 | 4442839 css1971
css1971's picture

Yup... Spot on. The City has basically devastated the rest of the UK economy. As you travel north and west away from London in Britain you get asymptotically closer to zero wealth.

What's fascinating is how few British have figured out their wealth is being sucked dry by The City.

Maybe why Scotland wants out.

Sun, 02/16/2014 - 15:47 | 4442594 kaiserhoff
kaiserhoff's picture

I spent two months in London one week,

  over Christmas, no less, and yes, there was pussy involved.

Sun, 02/16/2014 - 15:10 | 4442518 Mad_max
Mad_max's picture

Londonistan is full of foreigners. So any complaint about food cannot be directed at us English.

Now I'm off to have some fish and chips.

Sun, 02/16/2014 - 15:39 | 4442580 williambanzai7
williambanzai7's picture

T-A-X-E-S or the absence thereof...

Sun, 02/16/2014 - 15:52 | 4442613 Rafferty
Rafferty's picture

I'd rather live in Marseille for example.

 

You do realized that the Religion Of Peace is now ascendant in Marseilles?  It's almost majority Muslim, unlike London.  Oh wait a minute.........

Sun, 02/16/2014 - 16:04 | 4442636 linrom
linrom's picture

He is from Belgium, that's new independent state of Palestine, a result of Israeli-Palestinian peace talks. He is right at home.

Sun, 02/16/2014 - 17:18 | 4442825 css1971
css1971's picture

London would be the 6th biggest city in France by French population so the French disagree with you, and British food has come a long way; London is just behind Paris for Michelin stars, then you have the imigrant cuisine; Indian is of particular note, Lebanese, Greek, French, you name it.

Why live in London? Money. That simple. If you want money you need to be close to the source of the inflation, and the source is The City.

Sun, 02/16/2014 - 15:08 | 4442510 Colonel Klink
Colonel Klink's picture

Money laundering at it's eliteist!

Sun, 02/16/2014 - 17:40 | 4442871 Kirk2NCC1701
Kirk2NCC1701's picture

Elite Wealth on the Run:  Foreign aristocrats, dethroned royalty and despots run off to London, park their money there and take on global residency.  London, NY, etc.

There's nothing more respectable than dirty money and blood money that had been properly aged some decades or generations.  Like a good wine, it seems to only improve with age.

Sun, 02/16/2014 - 20:43 | 4443416 Colonel Klink
Colonel Klink's picture

I think we need to uncork some of the aristocratic blood for their lesson to be learned.

Sun, 02/16/2014 - 15:09 | 4442516 muleskinner
muleskinner's picture

People from the US emigrate to Dubai or Thailand or Chile.  People from China move to the West Coast and Vancouver.  People from the ME move to London. 

Canadians move to The Yukon.

You don't have to travel around the world to understand that the sky is blue everywhere - Johann Wolfgang Goethe

Cubans move from one tobacco field to the next tobacco field while they drink their rum and rhumba boogie.

Are we there yet?

 

Sun, 02/16/2014 - 15:15 | 4442535 pragmatic hobo
pragmatic hobo's picture

blow off phase of global liquidity bubble ...

Sun, 02/16/2014 - 15:24 | 4442558 buzzsaw99
buzzsaw99's picture

Better to be poor in Phoenix than rich in London.

Sun, 02/16/2014 - 16:37 | 4442713 tocointhephrase
tocointhephrase's picture

Cos you have tried both and four green arrows. Some real loser bums on here today.

Sun, 02/16/2014 - 15:25 | 4442559 starman
starman's picture

What could possibly go wrong?! Plenty fools left on this world!

Sun, 02/16/2014 - 18:55 | 4443103 kaiserhoff
kaiserhoff's picture

Well banks uber alles worked so well for Ireland, and Iceland, and derivatives have been just ducky for Duestche Bank;)

Tail, meet Dog.

Sun, 02/16/2014 - 15:31 | 4442569 RaiZH
RaiZH's picture

I need to get out of the London, the commute from the suburbs into central is just terrifying and walking past empty & sold £1 million + flats everyday just takes the mick. 

Worst thing of all - we don't even have basements over here. I live in a box. 

Sun, 02/16/2014 - 17:05 | 4442795 css1971
css1971's picture

London is a young man's game. I lived there for a number of years before leaving.

You make your money there due to the insane levels of inflation, then move back out to somewhere sane to live and buy a better standard of living for yourself.

Sun, 02/16/2014 - 15:40 | 4442582 Jack Burton
Jack Burton's picture

Great new luxury flats are being built along the Thames, the market is mostly aimed at Chinese and rich oil state Arabs. It is a way to get money out and into safe havens. The UK and London aim to be a world safe haven for money and for banking fraud. The secret services, the military and the vast London police organization is tasked with protecting the new money coming to London. Lack of regulation in finance is aimed  at making the " City of London" a safe haven for financial engineering and bank fraud". You will note, that much of the subprime meltdown was engineered in London where no rules existed, also, the derivatives fraud is centered in an unregulated banking haven inside the City of London. The Cameron government is doubling down on financial fraud and considers it the future of economics. London growth is meant to be based on a safe haven for fraud, so far, for the elites, it is working very well. So, expect bigger financial disasters in future, for no matter how smart London bankers claim to be, they are not smart, they are criminal. There is a difference, though they would never admit to it. Cameron is a banker's tool and dupe, but it is not as if he does not know just what game he is playing at. FRAUD!

Sun, 02/16/2014 - 17:44 | 4442885 Kirk2NCC1701
Kirk2NCC1701's picture

Given that the UK produces bugger all that the world wants, the City of London would have lost it status as one of the world's top banking centers long ago, had it not been for the constant influx of ill-gotten money and wealth.

Now, if only the folks in Frankfurt learned to attract that same kind of clientele... London would crumble very fast.

Sun, 02/16/2014 - 19:49 | 4443261 scraping_by
scraping_by's picture

They don't read the right fiction. John Le Carre's post Cold War novels were all about London private bankers laundering dirty money, usually from Russia.

Now, if Le Carre had put in a scatalogical subtext instead of a religious one, maybe they would have twigged earlier. But, no...

Sun, 02/16/2014 - 22:32 | 4443777 tony wilson
tony wilson's picture

old book but a great one maybe 60 years old but still true.

The Empire of The City

By E.C. Knuth

 

The colossal political and financial organization centered in London, known as "The city," operates as a super-government of the world; and no incident has occurred anywhere in the world without its participation in some form. Its pretentions are supported in the U.S. by the secret International Pilgrim Society, sponsor of the Cecil Rhodes "One World" ideology which was launched about 1897.

http://www.hiddenmysteries.com/xcart/Empire-of-The-City.html

 

Sun, 02/16/2014 - 15:41 | 4442585 BobRocket
BobRocket's picture

It was true up till july 2013 that inflow money was buying property in London because to an outsider it was cheap (£ down due to QE) however the £ is now rising and that property is no longer cheap if you are on the outside (UK QE winding down, QE everywhere else still going full tilt).

This is investment grade capital being mis-allocated (and yes, it will all end in tears)

 

On a side note, all those M+ houses being bought used to be 3M+ houses, it is the firesale prices of mansions that is raising the average price of houses (as opposed to the price of an average house (which in the UK is one step above a hovel))

 

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