In the secondhand market, western Europeans (10%) are second to UK buyers (73%) as the most dominant source of demand. They are less active in the new build market (4%).

In contrast, it is Chinese and Pacific Asian buyers who are most active (26%) among foreign purchasers in the new build market. They dominate the apartment market, but at lower price points than most other overseas buyers. Asians tend to be more investment orientated and benefit from weak sterling. The exchange rate has made prices look even cheaper to them since 2008 (see Graph 3).

Buyers’ decision-making processes appear to be influenced by their experiences of residential investment in their home markets, affecting the type of product and location chosen in London.

More than any other nationality, the Chinese and Pacific Asian market is attracted to the East of City area of London. Primarily from Singapore, Hong Kong, China and Malaysia, these buyers are particularly accustomed to investing in new build regeneration schemes at home and understand that they can benefit from long-term capital growth here.

Good access and communication links to the financial district are key factors motivating choice among both investors and owner-occupiers from China and Pacific Asia.

Through concentrated marketing efforts, Chinese and Pacific Asian buyers pioneered overseas investment in areas such as Canary Wharf, and have proved particularly attracted to new-build structures with iconic architecture. They are often an important source of forward funding when buying 'off-plan'.

Developers have consequently sought to target the Chinese and Pacific Asians by tailoring product to their preferences in terms of configuration, layout and design features.

For buy-to-let investors, those living and working in London, or those who have bought for their children studying here, the long-term capital growth prospect and opportunity to generate rental income is key.

Taken from
Spotlight: The World in New London