Foreign buyers, snapping up global real estate in different locations as they travel around the world, have been setting the trend in high end property.
Most of the time there is a 'seasonal' dimension to these investments. Winter in St Tropez, for example, skiing in St Moritz at Christmas, sit out the spring in London, Paris in summer, New York in the fall. Buying behaviour which has helped generate global hotspots.
In the last few years British, French and American real estate have proved the most stable and attractive markets for investors seeking safe assets. A mixture of low interest rates, good infrastructure, transport networks and relatively consistent politico-economic systems have enticed real estate investors. But, in an increasingly uncertain world new markets are constantly being sought.
In Spain, for example, the Spanish government have been actively courting overseas real estate buyers. Lucas Fox, a specialist real estate agency, report an increase in sales of luxury property in Barcelona. According to the company's Market Overview and Forecast For 2015, 38.9 per cent of real estate purchases in Barcelona in 2014 were for “investment use”.
“The market really only started improving in late 2012 and sales velocity is now at least three times faster,” Alex Vaughan of Lucas Fox explains. “Sales price stabilisation, more realistic asking prices from sellers, higher demand from international clients, more finance options, improving Spanish economy and general market confidence have all contributed.”
Hong Kong is another hotspot attracting interest from overseas buyers.
With over 1200 skyscrapers and 36 of the world's highest 100 buildings it is aptly named 'Vertical City'. Tight constraints on space to build – Hong Kong has an area of 426sq m compared with London's 607 sq m – and growing demand, has forced the city and its property prices upward. Hong Kong Island boasting top international schools, exclusive clubs and flourishing business districts has become one of these developing hotspots.
Since 2008, property on Hong Kong Island has climbed a massive 80 per cent. A £6.6m ($10m, €8.7m) slice of super prime bought less than six years ago is now worth £11.9m ($18m, €15.7m).
This compares with London, where residential real estate grew by a healthy 18 per cent between 2013 and 2014, and by 107 per cent since 2005. The average price of property in the UK's capital now costs £330,000 ($495,000, €437,000). However, while you will pay around £10,600 ($16,000, €14,100) in council tax for a £9.9m ($15m, €13.1m) piece of London luxury real estate, a similar priced property in Hong Kong will set you back £68,808 ($95,918, €84,700) per annum.
The smart money in London, of course, is now being placed on Zone 3, with Savills predicting a 5.7 per cent climb in prices year on year for the next four. Within this build, Bellway's WestSide developments in Brentford is attracting some interest.
Across the pond, 2014 proved a great year for New York real estate. The average price for luxury apartments in Manhattan increased to £1.1m ($1.7m, €1.5m), a significant climb from 2008 when the most expensive luxury apartment would have cost £900k ($1.5m, €1.3m).
Good to report that things have picked up from the economic crisis of 2008 when many Big Apple apartments went to rent, and several big projects stalled or were cancelled.
Now, New York City is much more upbeat with several new developments on stream. Luxury units at Five Sixty West 24th Street in Manhattan's Chelsea arts district are now fetching £4.6m ($7m, €6.1m).
Global real estate, of course, is fluid, and traditional markets now live with increasing competition from new and developing hotspots. In an increasingly uncertain world new markets are constantly being sought. Emerging markets such as Singapore, China and Brazil, as well as recovering cities like Barcelona and New York, offer intriguing markets for an increasingly nomadic tribe of real estate investors.
Written by Sergio Burns