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 [4]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.
[5]
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 [6] [6]