A few days have passed since Britain voted to leave the European Union, and while predictions of how the Brexit might affect global luxury real estate have slowed, stories covering the potential economic effects of that decision have continued unabated.
Even without much real estate specific news, one can intuit that the current state of uncertainty — a situation in which more than 2.7 million people and growing have now signed a petition calling for a second U.K. referendum and others are speculating that there will never be a Brexit, even though the referendum was passed — is sure to affect property buys big and small.
With that in mind, here is the Sunday roundup of the latest Brexit news as it relates to the global real estate market.
Foreign Buyers Secure London Bargains; Others Look to Renegotiate Prices
A weakened post-Brexit pound has meant that foreign investors are able to secure a piece of luxury London real estate at a tremendous bargain. That’s drawn buyers from Italy, France, the Middle East and other global markets, according to the Financial Times and The Guardian. But just as some are making new buys, others are pulling out of recent purchases or attempting to renegotiate for lower prices. “My calls today have been 50:50 between clients putting their searches on hold and those stepping them up,” Roarie Scarisbrick, a partner at the buying agency Property Vision, told the Financial Times. One likely recipient of more real estate business? Scotland, a country that many believe will ultimately end up in the EU, The Guardian wrote. “Between 7 a.m. and 1 p.m. on Friday, searches for Edinburgh homes were 250% up on the previous day,” property website called Rightmove told them. (Financial Times and The Guardian)
Luxury Properties Across U.S. Cities to Fare Well Post-Brexit
While many have predicted that New York’s luxury market will get a boost in the wake of the Brexit vote, other major U.S. cities might also see new interest. “Anything in the United States will fare very well with the European-centric audience,” Leonard Steinberg, president of New York-based brokerage Compass, told Yahoo! Finance. “New York, Boston, Chicago, Miami, Los Angeles — I think major centers will always do very well with a foreign buyer,” he said. These benefits, though, might be short lived, Mr. Steinberg added, noting that uncertainty in Europe might work its ways to these shores, and the upcoming presidential elections might also lead to a slowdown. (Yahoo! Finance)
Hong Kong Investors Make Post-Brexit Vote Buys
Chinese interest in purchasing London investment properties is up after the Brexit vote, according to the South China Morning Post. Three London projects went up for sale Friday in Hong Kong: Keybridge, City Wharf and Aykon London One. There was interest in all three, with Hong Kong investors citing self-use or long-term appreciation — not rental income — as the reason for pursuing these property buys. Because of the weakened pound, Hong Kong buyers can currently save more than HK$80,000 (US $10,300) on the 10 percent down payment of a HK$8.5 million property. (South China Morning Post)
Brexit Could Mean Hit to U.S. Retirement Accounts, Lower Mortgage Rates
The U.K.’s vote to leave the EU is likely having a negative effect on one aspect of U.S. financial life right now. Because the decision caused global stock markets to plunge, many U.S. retirement accounts also took a hit, according to the Washington Post. But while retirement accounts might be down, mortgage rates will probably stay down this year, too, although it’s not sure how long the current rates will last. (Washington Post)