London overtakes Hong Kong as world's busiest super prime property market as French, Hongkongers fuel purchases

The British capital recorded US$3.75 billion of sales from 201 transactions, according to property consultancy Knight Frank, which defines "super-prime" as homes worth US$10 million and above. London snatched the crown from Hong Kong, which had 169 deals totalling US$3.2 billion.

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"London's super-prime residential market shrugged off Brexit and even looked through the pandemic - confirming the UK capital as the world's leading wealth destination," said Liam Bailey, global head of research at Knight Frank.

Hongkongers, encouraged by the UK's offer of a citizenship path for British National (Overseas) passport holders, may have had a hand in helping London to the top spot. It posted a 3 per cent increase in transaction value in 2020. Hong Kong, which outranked New York and Los Angeles in 2019, saw a 31 per cent slump in 2020.

Elsewhere, sales rose in nine of the 12 markets tracked by Knight Frank, with buyers spending a total of US$18.9 billion on 1,066 sales. However the average super-prime selling price fell 4 per cent globally to US$17.7 million in 2020, it said.

Buyers from Hong Kong accounted for 8.5 per cent of purchases by foreigners in prime central London, the second largest-group along with mainland Chinese and Americans, according to Knight Frank. The French contributed 14.6 per cent.

While Hongkongers have traditionally been among the top buyers of UK property, the citizenship path for 3 million eligible BN (O) holders and their dependents helped propel demand in London and other UK cities.

Besides, upscale properties in London are also being sold at "greater discounts," giving another incentive for buyers to invest in the city.

"Across all prime central London, the average discount relative to asking price was 8 per cent in the year to March 2021," said Flora Harley, associate, residential research at Knight Frank. The discount was about 12 per cent for property worth £10m (US$13.7 million) and above, she added.

The trend is likely to continue, according to London-based property agency Benham and Reeves.

Demand for high-end homes, or those at £2 million and above, rose by 1 per cent last quarter over the final three months of 2020, it said. There was also a 2 per cent increase at the £10m and higher price point.

"We're slowly but surely seeing momentum grow across the prime London market," said Marc von Grundherr, director at Benham and Reeves. "A further uplift in homebuyer demand during the first quarter is certainly a positive sign for the year ahead."

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved.