- Property investors in London, Tokyo, and Cape Town can now get, on average, 28% more space compared to last year
- This is due to the weaker US dollar compared to other currencies
- Areas that traditionally have had popularity with high net worth buyers such as Belgravia, Chelsea, Kensington, Mayfair, Notting Hill and Holland Park have recorded uptick in activity
Property investors in London, Tokyo and Cape Town can now get, on average, 28% more space for US$1 million compared to December 2021, according to an analysis conducted by global real estate firm Savills.
Thanks to changes in the US dollar against other global currencies, a US$1 million budget will now buy 4,137 square feet of prime residential property in Cape Town, 609 square feet in London and 577 square feet in Tokyo.
This is an additional 895 square feet, 132 square feet and 127 square feet respectively.
The Savills analysis found that dollar buyers can benefit in two ways; either a reduced spend in dollar terms for the same property or an increase in home size for the same amount.
On the other hand, buyers in Singapore, can only benefit from a 6% increase in property size for the same budget. This is due to the Singapore’s economy remaining relatively stable and its currency has not waned as much as the US dollar.
London calling
In London, a million US dollars will buy 609 square metres of prime London residential property, an increase of 28% since December 2021.
Prime Central London prices are down by 17.8% in sterling since 2014, but have fallen by 47.5% in dollar terms, which takes into account both prices falls from the peak and the weaker pound.
From a value perspective, this may push Prime Central London to many dollar-flush buyers looking for foreign property.
According to Savills World Cities Prime Residential Index, London currently ranks sixth on the list of cities with the highest prices per square metre.
Unsurprisingly, London has a strong appeal to international buyers, thanks to its rich culture, restaurants and shopping districts, as well as having a foothold into Europe.
Savills Q3/2022 Prime London Rental Index recorded a 14% increase in rental values in prime central London, which is the highest annual growth recorded since 1979.
This rent hike is driven by intense competition for homes located in the capital, given the strong imbalance between a shortage of prime rental stock and increased tenant demand, up about 70% compared to August 2019.
Agents on the ground have noted that international high-net-worth buyers are gradually beginning their return to traditional prime postcodes in recent months, thanks to the easing of pandemic-related travel restrictions.
There has been an uptick in activity across areas such as Belgravia, Chelsea, Kensington, Mayfair, Notting Hill and Holland Park.
“With the strong Singapore Dollar, investors should consider capitalising on the positive currency exchange to purchase international prime property,” said Jacqueline Wong, Executive Director, Residential Services Singapore.
“It is a highly opportune time for international investors to set their sights on central prime London homes. London continues to attract global investors and is a popular education hub for many Asian families.
“The resilient rental demand for London homes provides a strong platform for investors. Properties in upscale locations, such as Belgravia, Knightsbridge and Kensington, that provide consistent cash flow year-round and with potential appreciation on capital values, are a good way of hedging against inflation.”
