DTZ reveals 24% fall in cost of buying real estate for overseas buyers thanks to currency moves and price drop – report
Inquiries about purchasing British properties from investors in Qatar, Saudi Arabia and the UAE have seen a 25% increase in the wake of the UK vote to leave the European Union (EU), according to global real estate services firm DTZ.
Speaking to Gulf Times, Ravvy Kaur, a surveyor at DTZ, cited a report from the company’s London team pointing out that many property investors from the Gulf are “making the most” of the devaluation of the British pound and a decrease in asking prices.
“Immediately after Brexit, many people were on the phone asking ‘What can I get, and how can I make the most out of it?’ They can immediately see the devaluation of the pound, which could take some time to recover,” the daily quoted her as saying.
Kaur said it was a “good period” for investors to “make the most of the opportunity, and invest while they can”. According to the report in the newspaper, she based her observations on a decrease in composite property prices by around 24% in the UK after Brexit.
“First, you’re getting an exchange rate benefit of 14% and on top of that you’re also getting another 10% decrease on the asking price. In total, you’re getting about 24% decrease and if you put that into perspective, now’s a great time to buy property in the UK,” she noted.
Strategies by institutional investors in the UK include a “wait and see” investment approach, Kaur told the daily, while international investors “are taking advantage of favourable exchange rates”, the devaluation of the British pound, and the opportunity to enter the UK property market.
She added that many Qataris invest in commercial and residential properties in prime locations, such as the West End of London, Mayfair, Kensington, Richmond, and some parts of the North and East End, and Canary Wharf.
“The first approach is to buy property and rent it out for additional income as an investment, while the second method is to invest in a residential property in the UK to have a home within London in high-quality townhouses within prime areas like Kensington and Richmond,” she was quoted as saying.
Kaur said “further depreciation” of the British pound would depend on future policies and decisions by the government. However, she expressed optimism that “momentum will pick-up” over time, the report added.
“It’s really early to say what will happen next but people are definitely trying to make the most out of Brexit… shock of the UK’s decision to leave the EU will eventually tail off, and commercial and residential price growth will pick-up in the medium term,” she said.