IP Global issues ‘Olympic Edition’ Property Barometer Q2 2012
- London consolidates its status as global financial real estate market and is strongly recommended for investors
- Middle Eastern investors well-rewarded for their continued loyalty to London
- China eases restrictions on housing real estate, opening up opportunities in Beijing
- Tokyo benefits from earthquake reconstruction and provides new opportunities for investors
- Athens ranks last among Olympic cities covered in the report, compounding Greece’s financial woes
United Arab Emirates, Dubai; 27 June 2012 – IP Global, a leading property investment company specializing in securing prime investment opportunities in 20 emerging and developed markets around the world, issued its Olympic Edition ‘Property Barometer’ for Q2 2012 in June. The insightful research showcases the most attractive residential and commercial property investment markets around the world, based on a study of cities that have played host to the Olympic Games in the past. The report categorizes hotspots as ‘Gold’, ‘Silver’ or ‘Bronze’ medallists, with the least attractive investments spots being ‘disqualified’ from the investment stakes. The report ranks London, Beijing and Tokyo as top placed in this year’s investment Olympics. London has been identified as providing strong opportunity, low-risk and high returns for investors, with Beijing and Tokyo selected as interesting cities to watch. Athens and the US city of Atlanta are ‘disqualified’ from the running due to disappointing performance and an uncertain economic outlook.
Host of the 2012 Olympics, London takes first place, earning a gold medal as the best place to invest in property, with price rises of up to 3.2% in sales prices and 1.5% year on year increases in rental prices. This should come as good news for Middle Eastern investors as they have continued to favour London as their primary investment choice. Strong price rises and increasing rental yields consolidate London’s status as a ‘safe haven’, and the Future House Price Sentiment Index shows it to be at a 20 month high.
Host of the 2008 Olympics, Beijing is ranked as a city to consider, with a 30% increase in sales volumes this year. Initiatives by local government in China to stimulate growth have had a positive impact on sales. In addition, since February 2012, commercial banks in Beijing have been offering mortgages to first-time buyers at or below the benchmark rate, which has boosted demand.
Host to the 1964 Olympics, Tokyo has had a rough ride with a spate of recent natural disasters. In spite of this, Tokyo skates into third place and has been selected as one to watch thanks to strong domestic demand and positive indicators for the Japanese economy. Expats may have fled the country following the 2011 earthquake which affected the luxury market, but the leasing market has remained stable and overall Japanese economic growth is forecast at 2.2% annually for 2012.
House prices in Atlanta are now at the same level as they were in 1996, the same year Atlanta hosted the Olympics. US house prices are down 32% overall since the peak in 2007, while Atlanta, the capital of the US state of Georgia, and the most populous city in the U.S., has seen median house prices continue to fall, with the median sales price dropping by 15% in 2011. Despite being home to world headquarters of the Coca-Cola Company and other major international corporations, Atlanta is disqualified from the property Olympics this year.
The birthplace of the Olympics last hosted the games in 2004. Greece’s financial woes of late and fears of a ‘Grexit’ from the Euro have surely contributed to its disqualification from the top spots for investment. The Greek capital Athens now ranks last among all 27 European metropolitan cities in its ability to attract real estate investment, is viewed as high risk and shows no signs of recovery in the short term.
Robert Pearce, Middle Eastern Director of IP Global says, ‘London has always been the most attractive destination for property investors from the Middle East, and I’m pleased to see it has continued to yield excellent returns on investment. We have been advising our clients on investing in a variety of different opportunities throughout the UK, from student accommodation to luxury properties, and they have all been extremely satisfied with the returns on investment.’