Previously, London was a favourite city for rich and powerful foreign investors to buy luxury property. And why wouldn't it be? London is one of the oldest and most influential cities in the world, and has close connections to the European continent, Asia and North America. In fact, for the past two years, London has triumphed over New York to be the top spot on the ‘Most Important Cities to ultra-high-net-worth individuals’ list, which is part of the Knight Frank Wealth Report.
However, after the chaos of Brexit and fears of its aftermath, New York has now been named the best city for overseas investors. According to a report by broker, Cushman & Wakefield Inc, foreign investors spent approximately $25 billion on commercial real estate in New York in the 12 months through June, while the value of sales in London fell from $39 billion in 2015 to $25 billion in 2016.
According to the report, “London lost out as Brexit concerns and high pricing hit even before the referendum…(New York) may feel its influence grow as its chief rival is distracted”. However, as pointed out by BNP Paribas, 2015 was an exceptionally good year for commercial investment, and so a slump in 2016 was inevitable. In the first half of 2016, commercial investment in European cities slumped; in Germany, investment fell by 24% in the first half of the year compared to 2015, while investment in Britain fell by 36%. France fell by just 3%.
According to the report by Cushman & Wakefield, the only two cities to overtake London as the best place for overseas investors was New York and Los Angeles, probably thanks to the almighty power of the American dollar. While London is still firmly top place for investment in Europe, we can’t help but wonder if next year’s report will be affected by the presidential election? Let’s wait and see…Apartment for sale in New York