Luxury property prices values in central registered their first annual drop in five years following a drop in consumer confidence and fears that the UK is about to enter a recession. One bright note is the Ultra-Luxury segment, which still seems immune

London Luxury Property Prices Falling

Knight Frank, a London-based real estate consultancy reports that property prices in London’s 9 most expensive neighborhoods dropped 1.6% from August 2007. Values fell 1.3% from July, following drops in the previous three months. In fact, house prices across the U.K. have now fallen ten straight months and London is only now catching up with this trend.

According to the Nationwide Building Society, the average property has seen £20,000 wiped off its value and now stands at £164,654 and demand from buyers remains subdued.

Nationwide is known for its “conservative,” predictions, so this is actually a warning shot across the bows of property prices in the UK. Expect to see further drops this year and no recovery at least until end 2009.

Home-buyers are being affected “by pessimism in the financial services sector, particularly relating to the size of this year’s bonuses,” Liam Bailey, Knight Frank’s head of residential research, said in the statement.

Homes worth less than £1 million are the most affected, with appraised values down 9.2 percent from a year ago, because prospective buyers still rely on mortgages to make purchases.

Ultra-Luxury properties worth more than £10 million gained 2.9% from July, or 19% more than a year ago, basically because of demand from wealthy overseas investors paying cash.

Knight Frank describe these as “super prime” properties and suggest they “have proved immune from the downward trends elsewhere. There are now signs that the gap between this sector and the rest of the market is growing.”

Recent price records set include the most expensive basement flats in London, the sale to Lakshmi Mittal of the most expensive home in London for £117 million and the record price set for a luxury flat in St James’ Square.

Knight Frank compiles its monthly index from appraised values of representative properties in Mayfair, St John’s Wood, Regent’s Park, Kensington, Notting Hill, Chelsea, Knightsbridge, Belgravia and the South Bank neighborhoods of London.

It seems as though trouble is brewing in the luxury real estate market in Mumbai.

Demand from local investors has died down dramatically, and now even the Non-Resident Indians or NRI’s who were major investors in such luxury properties, are cooling off. NRI’s are expecting property rates to go lower, just as the US property market is currently witnessing major changes due to the subprime crisis.

Until around four to five years ago, there were just a few developers who were involved with building luxury homes. However many others joined in, due to the higher margins involved.  These developers entered the luxury sector, without a proper analysis or assessment. Thus now they face an imbalance between demand and supply. In the suburbs of Mumbai, the supply outstrips the demand. In fact it is estimated by Jones Lang LaSalle, real estate consultancy firm, that supply exceeds demand by nearly 25 to 35%.

The NRI investors comprised of nearly 20% of luxury home buyers. And these numbers have dropped. The drop in numbers does not look good for the luxury realty market in Mumbai. Moreover, multiple developers seem to be attracting the same NRI segment. Developers are linking up with banks, who have a list of high net potential people, and are offering them freebies such as free round trip tickets to India, in order to take a look at their properties.

At such times, it makes more sense to attract people of Indian origin. PIO’s are those generation of people, whose forefathers migrated during the British reign, and are now settled abroad. There is a considerable number of PIO’s in Australia, Africa, the UK etc.

Luxury Property is proud to announce the first of many foreign-language blogs

iHaozhhai.cn is the Chinese language version of The Luxury Property Blog. With a Chinese domain name, in-country translation and research, Chinese search engine optimization and a strong program of promotions, Luxury Property Dot Com will soon become a force to be reckoned with in the international luxury real estate market.

For those of you interested in joining our growing team of professional real estate bloggers, this development represents an extremely interesting breakthrough. If you are - as you aught to be - considering the fact that China is becoming a global power house financially, the opportunity to reach a Chinese audience, in Chinese is really too good to be missed.

The Luxury Property Blog offers the opportunity to speak to Chinese buyers in their own language, offering luxury properties for sale to one of the wealthiest group of buyers in the world. According to a study by Merrill Lynch (present mistakes not-withstanding) China boasted 345,000 millionaires in October 2007, up 7.8% from the previous year.

China also has 4,935 Ultra-High Net Worth Individuals, with financial assets in excess of US$ 30 million, along with 106 dollar billionaires.  

We would suggest that to ignore this market and pool of potential luxury real estate buyers would be a mistake, and are fully committed to a presence in the Chinese Luxury Real Estate market, along with plans to enter other foreign markets in the not-too-distant future.

If you are interested in writing a blog on your real estate market with the possibility of having your words translated into Chinese  and published on a Chinese blog, please contact: Mark Knowles

“Luxury for All” -  the motto of buyers and the Indian property developers it seems. Everyone wants everything within arms reach today. The spending power of Indian consumers has increased along with the booming IT Sector, real estate and readily available, hassle-free bank loan facilities.

Due to widespread development and increased knowledge of tourism in India, it seems as if luxury properties have emerged from nowhere. Actually, we can’t really say from nowhere. We Indians have been and still are intelligent enough to and educate ourselves wisely in the ways of many other foreign countries. Our youngsters are taking degrees and diplomas from foreign universities and putting their intelligent brains to use in their own country. Thus we have many high-tech strategies for the improving the Indian economy.

Since 1999, India has seen a high growth rate in the IT Industry; the idea of luxury properties, homes and apartments has been brought into focus by the blossoming real estate market. The Indian approach to study, perseverance, enthusiasm and the desire to improve the financial position of every citizen has pushed the Indian economy forwards.

There are a number of  luxury properties which are famous both within the country and overseas. Amongst them are NCPA Towers, Buckley Court and Hiranandani in Powai, Mumbai. The first view of Hiranandani Gardens Township as you get into the wide Jogeshwari-Vikhroli link road pretty much leaves you gasping for air. It’s a wonderful sight.  From nowhere, a skyline suddenly appears with regal arches, royal and palatial domes. They have amenities like Hiranandiani School, a Club house, the famous galleria shopping mall, a beautiful Nirvana park, Hiranandani Hospital, Hakone Entertainment etc..

Unlike the capital, Delhi - Mumbai has two main advantages. First , Mumbai is never in darkness- due to the privatization of power. Second and something that affects the whole community - the water chaos during peak seasons. The smallest luxury can make one feel luxurious if you are satisfied with the basic amenities. So, in Mumbai, one really enjoys luxury, even in a small apartment which is equipped with small luxuries.

Some luxuries remain out of reach, of course. Mukesh Ambani, India’s wealthiest man, is busy creating what will be one of the most expensive private residences in the world. Rumored to be costing in excess of $1 billion, his 27 storey building, “Antilla,” will be complete with private helipad, internal waterfalls and an attempt to recreate the hanging gardens of Babylon.

The outer skin of the building has been designed to have entwined plants running through to the top of the building and will reach a height of 170 meters making it one of the highest buildings in Mumbai. The top four floors will be given over to personal space for the Ambani family, and much of the space on the lower floors to guest residences, parking spaces, and, amongst other luxuries, a movie theater.

Ambani has come in for some considerable criticism over the design of this building, mostly over the fact that it is being touted as an “eco-skyscraper,” and such a gross display of personal wealth in a city that houses one of the largest slums in Asia.
 

Gianni Versace’s Lake side villa has sold for a staggering $52 million. The buyer is reputed to be Russian multi-millionaire Arkady Novikov, a flamboyant restaurateur affectionately (or not, depending) known as the “Blini Baron.”

The house had been quietly on the market for some time and according to The Times, sold for $6 million over the asking price.

“The Russians are coming!” was a familiar cold war refrain that is coming true, true, true, along both the shores of lake Como and the Italian Riviera. Luxury properties are being snatched up throughout the region and there has already been some backlash from the local communities.

Not known for the subtle approach, I will certainly be interested to see what the “Blini Baron,” has in mind in the way of redecoration. Over-the-top is the word that first comes to mind, but time will tell. Assuming he can raise the financing that is – so maybe this doesn’t mean the end of tours around the property?

Novikov was quoted in an interview as saying, “I am often asked whether I’m going to expand my company. I always tell myself, ‘Enough. Stop’ But I can’t stop!”

The Villa Le Fontanelle was originally built in 1776 and previously owned by the Cambiaghi family. Versace purchased and completely refurbished the property  in 1977, restoring the beautiful neo-classic style faithfully. Versace himself supervised every step of the process and apparently selected every item in the house personally. Although the restoration of the grounds and gardens was left in the capable hands of Sir Roy Strong. The Lake Como villa was Versace’s favorite haunt, and he certainly seems to have been most at home there.

According to Christof Birkhofer, Managing Director of Engel  & Volkers, a German-based real estate company, the luxury real estate market in Qatar is thriving,. Despite the massive increases in construction material prices and housing rents recently.

Engel & Volkers specialize in luxury real estate world-wide and launched it’s operations in Qatar last week at the opening of the 3rd Qatar International Real Estate and Investment Exhibition (Q-Rex) at the Doha Exhibition Centre.

"The demand for local and international properties is very high. People that are visiting us at our booth are genuinely interested in the properties being showcased at the exhibition,” he said.

 “There is high demand for properties in the Doha real estate market, including rental space in residential and commercial estates, but Qatari buyers are also looking for properties overseas,” Birkhofer told The Peninsula yesterday. Many Quatar nationals are enquiring about luxury property in London, Cyprus, Switzerland and Germany.

"The real estate market in Qatar as in the whole region is booming. Doha, Dubai, Abu Dhabi, Bahrain are all witnessing a real estate boom and the demand exceed the supply for properties," said Birkhofer.

 The company’s most luxurious properties are being shown at the exhibition - a $42 million residence in Miami, traditional antique castles in Europe and a private island in Seychelles, to mention just a few.

 The luxury properties that Engel & Volkers handle in Quatar sell from as little as $275,000 for a condo in The Pearl Qatar to more than $11 million for villas and penthouses.

 Birkhofer went on to say, "The Doha real estate market is a perfect location for our company. We will provide clients not only access to international properties, but we will also provide a gateway to our large client network."

Engel & Volkers is a leading European luxury real estae company with branches situated in 25 countries around the world, including Florida, South Africa, Majorca, Phuket, and now Doha.

Their Middle Eastern website is here

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