Property: Waves from Far East fail to brake home market
Saturday 06 December 1997
"What they do want to know, though, is how many buyers from the Far East are owner-occupiers. That is far more important for them, because understandably they don't want to buy into a development that is predominantly rented out."
Although Far Eastern investors have been of enormous help to the London market as a whole in the past few years by providing a sold financial base for the developer, the strength of the home market is far more important.
Savills Research finds the percentage of Far Eastern buyers of new build in the Docklands to be eight per cent. At the present time, the success or failure of a development selling in the Far East is hard to determine. Tom Marshall saw two well-known developers in central locations return with entirely different stories - one had done well, the other very badly.
Barratt, for instance, might well have held its breath during the recent turmoil in the stock markets having sold 50 units at its Globe View development in Upper Thames Street to buyers in Hong Kong in September. Nevertheless, none of the buyers has withdrawn. Prices start at pounds 180,000, rising to pounds 700,000.
Barratt does not take more than 30 per cent of any development abroad. However, where UK buyers might benefit is where developers either decide it is not worth marketing in the Far East at all, or they cut the number of units for sale there, putting more the way of the British purchaser.
The quality of stock going to auction these days has vastly improved. No longer is it a course of last resort for the vendor, whether private or institutional. At Savills second national auction held in London last week, Thornbridge Hall, a grade II listed neo-Tudor house with a stable block, sold for pounds 850,000 to a Cheshire businessman who intends to restore it for his family's use.
Private individuals, as opposed to dealers, who imagine they can pick up a bargain may find themselves bidding against like-minded buyers. Even so, Robert Weaver of Savills finds it gives the most accurate picture of the current market since there can be no back-room negotiations: "No one's hand is being forced", he says. "Nor is there any reason to assume that the property has some inherent problem."
On South Ferry Island in Liverpool's Docklands, Crosby Homes is intending to launch the remainder of its Coburg Quay development over Christmas and the New Year. As the first residents move in, so the next phase, St Lawrence Quay, will be introduced. Apparently, the site appeals across the spectrum from "retired merchant seamen to young professionals." Prices at Coburg Quay start at pounds 88,950. Sales : 0151 7342220.
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