Filed under: Real Estate Developments
After 17 months of misery, luxury home prices in London are finally up on an annual basis. Banking and hedge fund industry professionals are spending money again, largely because they're being paid again. Homes with values of above $1.6 million appreciated 1.6 percent in November compared to the same month last year. This was the first annual increase since June 2008. Nonetheless, prices remain 15 percent lower than the March 2008 peak. From October to November, prices grew 1.2 percent.
Liam Baily, head of residential research at Knight Frank, told Bloomberg News, "Anecdotal evidence from across our offices suggests that City money is becoming more apparent as we get closer to the end-of-year bonus season," continuing, "Demand from senior management is driving the market." Bonuses could wind up growing by 50 percent this year to 6 billion pounds in London's largest financial districts, and professionals in this industry are responsible for half the city's demand for luxury homes.
For homes at prices of more than $16 million, the price increases are even better: 1.9 percent from October to November this year. Residences in Chelsea, Kensington and Knightsbridge got the biggest boosts.
This has led to a bit of optimism. Luxury real estate could reach May 2008 levels by 2012, up to two years earlier than expected.