Will Brexit trigger a ‘buying spree’ for Asian investors?
Will Brexit trigger a ‘buying spree’ for Asian investors?
With the devaluation of the pound, many Asian investors are preparing to invest
“What happens now?”
This seems to be the question on the lips of many a concerned UK citizen, with the shock vote to leave the EU announced on Friday.
It’s truly ironic: many Britons who voted ‘leave’ did so with the belief that too many outsiders came to the UK to take advantage of economic opportunities.
Now, with the pound at a 31-year low, many opportunistic Asian investors are gearing up for what has been described as a ‘buying spree’ in UK residential property.
A report from Knight Frank describes how interest is expected to be especially strong from investors in Singapore, Hong Kong and China. It’s no surprise that UK real estate is suddenly very attractive to those from countries with an unfavorable exchange rate.
More: Could Brexit force property investors to exit the UK?
Malaysia-based Cornerstone International Properties is a real estate consultancy firm which markets foreign real estate to Malaysian investors. Company director Virata Thaivasigamony explains why he is advising people that now is the time to invest:
“In this short term, there are amazing gains for investors as the weaker pound has worked to our advantage.”
JLL’s Head of Research, Asia Pacific Capital Markets Dr Megan Walters, agrees:
“Overall, there remains a large volume of Asian capital waiting to be deployed, including into Europe […] A fall in the value of Sterling against Asian currencies, will provide an entry point into the UK for overseas investors; market that is the world’s fifth largest economy, and second to Germany in Europe.”
Not everyone is so excitable however, with the weakened sterling igniting caution in some.
More: Brexit could have major repercussions on UK real estate
As South China Morning Post writes, Stephen Innes, a senior trader at Oanda Asia Pacific said last week:
“Brexit will weigh negatively on the UK property market for years to come.”
He continued: “people will think twice about buying in the UK, and some will even look at capital preservation and leaving altogether.”
Those who already own property in the UK can take solace in the words of James Roberts, Chief Economist at Knight Frank:
“Ultimately, it should be remembered that the UK is a country with 60 million wealthy consumers, and a high skill workforce […] The underlying strengths of the UK economy remain in place, and ultimately real estate is an investment that works best for those who pursue long-term goals.”
Source: Property Report