Cooling measures drive property investors to look to Europe
The
Straits Times | March 30, 2013
Mar
30, 2013
Cooling
measures in Singapore and Hong Kong have forced investors in both places to
look to Europe for their property fix.
The
key cities of Munich, Berlin and London have emerged as the main centres for
Asian buyers, said IP Global, a Hong Kong-based property company.
"The
recent cooling measures in Hong Kong and Singapore have made investors,
especially non-residents, think twice about the additional costs (of buying
properties there)," said Mr Tim Murphy, founder and chief executive of IP
Global, which buys and manages international real estate for clients.
"Most
Singaporeans look for $1 million to $3 million price points for overseas
developments," he said.
"They
prefer one- and two-bedders for these investment properties and are looking for
strong rental yields and capital growth. "Some factors that investors
consider before taking the plunge include foreign ownership, market
performance, ease of buying and financing."
An
IP Global report found that Germany came out tops for investors. It noted that
there are no restrictions for Singaporeans owning property there.
Munich
is particularly attractive to investors as its population is expected to grow
by about 11 per cent to 1.5 million by 2025.
Office
vacancy rates are also low compared with other major cities, thanks to global
and medium-sized businesses driving the strong service-based economy.
Munich
residents have purchasing power of about €25,200 ($40,000) per capita per year
- one of the highest in Germany.
Berlin
is also a popular pick for investment properties.
Tourism
is a mainstay of the residential sector with nearly half of the 11 million
visitors each year opting for private apartment accommodation instead of hotels,
said the report.
Demand
for homes and rentals is also attributed to the influx of people into the city.
The
report said that 30,000 to 35,000 people move to Berlin every year, creating
demand forup to 20,000 new homes annually.
London
properties continue to attract foreign investors, lured by the city's status as
an investment safe haven.
Mr
Murphy said: "Buyers from Singapore and Hong Kong accounted for 40 per
cent of purchasers of new-build property in central London in 2011 and
2012."
Homes
in Mayfair, Kensington and Chelsea still attract the most investment, while the
private rented sector is drawing attention as a potentially undertapped market.
The report also indicated that the Crossrail project - which will be completed
in 2018 - is expected to boost real estate values in the city's outer
districts.
IP
Global also tipped Istanbul, Turkey, as Europe's real opportunity market.
"Half
the city's population is under 29 years old and global firms are setting up
local bases there due to its strong economic potential," said Mr Murphy.
Investment
in real estate in Istanbul is expected to grow by US$5 billion (S$6.2 billion)
a year as the city eases restrictions on foreign ownership, said the report.
Another
strong driver of European real estate comes from Chinese investors.
They
have pumped in US$10 billion annually in recent years, up from US$1 billion in
2007.
Martin Koh | 86666
944 | R020968Z
Sherry Tang |
9844 4400 | R020241C
Senior Sales Director
DTZ Property
Network Pte Ltd (L3007960A)
Email: marshe_inc@yahoo.com.sg