The influence of international investors and superrich foreign people in the city is becoming more noticeable. In Stadsleven ‘Big Spenders’ we investigate whether this trend is a risk or an opportunity. Ray Forrest, chair professor of Housing and Urban Studies at the City University of Hong Kong, writes on the upcoming real estate market for the superrich.
Reading the newspaper
Today`s South China Morning Post is full of real estate adverts. Most are full page or at least half page spread. Almost all are in London. It is the same every weekend. Occasionally, there is something in Manchester or Edinburgh-Melbourne or Sydney sometimes. Amsterdam doesn’t seem to be on the radar or, indeed, anywhere else in Europe.
What is on offer? Today, we have a new development in Limehouse Marina, described as ‘waterside harmony in the world`s greatest city’, with prices starting at around £ 460,000 (€….) That would buy you a one bed apartment. Then there is the ‘much anticipated FiftySevenEast development’ with a slightly higher entry level apartment at £489,000. This development will not complete till 2017.There is even a two page spread of an artist`s impression which doesn’t even have a name and you have to guess it`s London. This will be launched next week apparently.
Limehouse Marina. Credits: SouthEastern Star
Cities for sale
Who is buying this stuff? You get a clue from some of the selling points. Easy access to one of London`s prestigious universities is often mentioned. A son or daughter presumably needs a conveniently located flat for a few years. Fast rail access to Canary Wharf or the City are also prominent tag lines-appealing to those working in the financial sector or those who may need regular, private consultations about their investment portfolios. But for most buyers it is simply a good place to park cash or maybe a fortuitous combination of a student flat for their offspring which will cover the tuition fees when it is resold in a few years. The advertisements typically refer to the high capital appreciation and great rental potential which can be expected.
Cities are for sale in a global market place in which there is a lot of surplus cash looking for a home. Moreover, not all in these investors are in this ambiguous category of ‘superrich’ To be sure, we are talking about the relatively wealthy, people with a spare half million euros or so. But these days there are a lot of people in and around Hong Kong, and in most major cities, with that kind of cash.
Foreign money is still valuable
So what? If you have enough money you can buy a small island or a substantial country estate. Most of Greece is currently up for sale. That may be objectionable but they are the kind of purchases you read or hear about. They are remote, often literally. But these prestigious, underused or empty properties in the centre of cities are in your face-a very visible affront, particularly at a time when many are struggling to find anywhere they can afford to rent or buy. Moreover, vacant properties also create empty, lifeless spaces. The added dimension is that they are being bought by ‘foreigners’-at least that is the popular belief. Personally, despite the real estate catalogue on offer every weekend in Hong Kong, I think we need to look closer to home for most of these rich investors whether it is in Amsterdam or London. And , I am sure some of our rich ‘locals’ are ‘foreigners’ in someone else`s city.
Empty property. Credits: Mark Seton
Meer lezen?
- Lees ook de blog ‘Cities and the Superrich‘ van Ray Forrest van 7 september 2015.
- Klik hier voor meer artikelen over dit onderwerp in ons dossier Big spenders.