Sunday June 14, 2009

Ripe for the picking

EUROFILE
By CHOI TUCK WO

With the ringgit strengthening against the pound, Malaysians are among those seeking to snap up London properties at bargain prices.

So, is the worst over? That’s the burning question amid a flurry of surveys indicating “green shoots” pushing up Britain’s fragile property market.

While some have dismissed the activity as mere blips, Halifax’s latest report of the highest monthly jump in house prices for seven years in May has sparked sightings of verdant pastures.

Phew! The once dried out garden seems heading for rosy days again, after the dizzying rollercoaster ride the past few months.

More would-be buyers have begun registering with estate agents, as did the number of properties changing hands. That’s a far cry from the stasis portrayed in gloomy headlines.

There is even talk of multiple bids for prime properties that are reasonably priced for the new value-conscious but quality-seeking buyers.

But hang on, though. Do not be misled by the growing number of “on offer” and “sold” signs prominently flashed across London properties in estate agents’ websites.

For some, it’s a question of choice. Just like picking between Marks & Spencer’s Cook Asian oriental dish for £6.99 (RM37.04) and Tesco’s £2 (RM10.60) meal deals.

Hence, the limited yet no longer overpriced houses in good locations in central London are attracting more attention than those cheaper ones outside the city.

Nevertheless, the bounce may have been driven by cash-rich buyers chasing a limited supply of good quality homes and the usual summer uplift in the market.

And while price remains a determining factor in house hunting, it still boils down to location, location and location.

Yet no one is suggesting the market will be swiftly restored to frenzied dealings of the boom times. It’s just that the mood is subtly lighter.

After so many false dawns, it’s hard not to remain sceptical that house prices have actually bottomed out.

Crowded field: A row of signboards vying for attention in a prime location in central London. —Choi Tuck Wo

Ringgit savings

But two things remained certain. The pound’s slide against the ringgit and signs of the market stirring have seen an influx of Malaysian bargain hunters to London keen to snap up the best deals.

Many savvy investors are looking at the values on offer in the property market while stocking up on designer clothes from Oxford Street and taking in the sights at tourist spots.

With the ringgit gaining at least 20% against the pound and the market showing signs of life, some would rather get in now just before the recovery than to wait and miss the bottom of the cycle.

For when the market starts moving up again, many would pile in, falling over one another. And this will inevitably push up prices.

As far as one of Britain’s biggest developers is concerned, this is a golden opportunity for Malaysian investors to pick up the best bargains.

“Now is the time to take advantage of the currency savings as well as the buyers’ market before an upturn takes place,” said Berkeley Group managing director Piers Clanford.

He said his company was seeing more investments from overseas, including from Malaysia, as Britons were finding it difficult to get onto the property ladder.

Clanford admitted it was still a far way off from the boom days but things were starting to move now following the worst of the market.

He urged Malaysians to make the most of their ringgit savings as the pound would strengthen in due course.

Berkeley Homes will, in fact, return to Kuala Lumpur to showcase its City Walk project on June 20 and 21 following encouraging response to another scheme in March.

Priced from £175,000 (RM927,500), the development in Forest Hill, south-east London, will be exhibited at the Hilton Hotel in Kuala Lumpur Sentral between 10am and 6pm.

Window of Opportunity

James Thomas, head of residential at Jones Lang LaSalle, echoed similar views that Malaysian investors should cash in on the currency advantage to move in now.

“They hold a significant edge over British buyers and can save a lot of money as property prices have fallen back,” he said.

He spoke of growing evidence that while the market was still difficult, the scenario was better than it was 12 months ago.

In fact, he has just returned from a recent exhibition in Kuala Lumpur where six apartments at Aquarius House, part of St George Wharf in south-west London, were snapped up by Malaysian buyers.

“The response was good. We still have potential purchasers flying to London to view the properties,” he said, adding that the units were priced from £399,950 (RM2.119mil).

Thomas said that most Malaysians buy properties for their children studying in the UK, as holiday homes or simply for investment.

Undoubtedly, the strong ringgit can buy a lot more property in a relatively weak market now than a year ago.

Then again, it’s also true that the pound cannot fall forever. This also holds true for house prices.

Serious buyers must thus act fast as the window of opportunity is getting smaller by the day.

For owning a property in a global metropolis like London is seen by many as a concrete asset even in the most uncertain of times.

Choi Tuck Wo is Editor, European Union Bureau, based in London

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