Mainland Chinese investors the most influential buyers globally

PETALING JAYA: Mainland Chinese investors are the most influential buyers in the world’s prime new-build sector, favouring properties in Hong Kong, New York and London, according to Knight Frank’s Global Development Insight 3Q13.

Investors from Singapore and Russia come in second and third place respectively, said Nicholas Holt, head of research for Asia-Pacific.

Since the global financial crisis five years ago, private investors have looked to bricks and mortar as a means of preserving and growing their wealth. As a result, prime real estate prices in key locations such as Dubai and Hong Kong have reflected this, rising by 63% in Dubai and 81% in Hong Kong since early 2009.

Over the next 12 months, mainland Chinese, Russian and US-based investors are all expected to retain and grow their market share in new-build property.

The growing influence and importance of mainland Chinese reflects the rise of Asia as a wealth creation hub. Asia is second only to North America in terms of its billionaire population, and the number of high net worth individuals in China is forecast to rise by 137% over the coming decade, according to data contained in Knight Frank’s Wealth Report.

About 39% of people surveyed named political and economic risk in a buyer’s home market as a key driver for international demand while 47% of respondents stated that “the safe haven effect” was the biggest draw for their market. Education and lifestyle are increasingly important when investing overseas. New York, Paris and London are among the most sought after markets.

Governments across Asia-Pacific have introduced a number of restrictions for non-resident foreign purchasers of residential property. They are trying to strike a balance between giving domestic citizens an affordable stake in their country while still attracting high value international investment.

As well as understanding buyer trends, Knight Frank also looked at the reasons which underpin the decision to buy new-build residential property around the world.

Amid the global uncertainty caused by the financial crisis and the political instability caused by the Arab Spring, it is evident that the overall trend in global property investment over the past year has been driven by a search for safe havens.

Education and lifestyle are playing an increasingly important role when it comes to cross-border property investment. Cities that are home to world-class schools and universities, that offer a high quality of life and safe environment, stand to benefit in the long run.

Knight Frank is a leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Grubb Knight Frank, operate from 330 offices in 48 countries across six continents. The firm handles in excess of US$1 trillion (RM3.23 trillion) worth of commercial, agricultural and residential real estate annually, advising clients ranging from individual owners and buyers to developers, investors and corporate tenants. — by Wong Mei Kay

This article first appeared in The Edge Financial Daily, on November 29, 2013.

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