London mansion and penthouse buyers are not finding attractive bargains.
Sales prices for homes that changed hands for more than 10 million pounds ($ 13 million) in the second quarter averaged 95% of sales prices, according to a report by brokerage Knight Frank. That’s the lowest discount since late 2016.
“The market has tightened due to pent-up demand and tight supply,” he said by phone. Paddy Dring, Global Chief Sales Officer of Knight Frank. “Covid has meant that people are not selling unless they have to.”
Falling property prices from the pandemic has created opportunities for cash-rich investors with long-term prospects.
UK home sales collapsed after the government effectively froze the market for about six weeks until mid-May, as part of its efforts to curb the Covid-19 outbreak. The luxury market has been slow to recover, even as prices for cheaper homes increase.
Still, London has seen some very successful deals. Developer Christian Candy sold a mansion overlooking Regent’s Park for about £ 104 million, reported Bloomberg in June. The Polish Billionaire Dominika Kulczyk I buy a house near Harrods department store for 57.5 million pounds earlier in the year.
The capital of Germany flourishes in startups and became the European city that gained the most in the ranking of luxury properties prepared by Savills.
A total of 1.1 billion pounds was spent on luxury homes in the first eight months of 2020, a 16% increase from the same period a year earlier, according to the report. The number of deals was roughly in line with last year, driven by an increase in the first quarter.
For now, the prices of the most expensive houses in London do not seem likely to fall much more after the declines of recent years, he says Rory Penn, head of Knight Frank’s private office, in the report. “It doesn’t seem like another 10% is about to disappear overnight,” he says.
Restrictions on international travel meant that UK buyers accounted for 40% of deals for luxury homes in London in the first eight months, the highest share in a decade, according to the report. The relaxation of these restrictions will be a key factor affecting transactions in the fourth quarter.
77% of those consulted in a survey retain their purchase intention and the number of customers who prefer houses increases.