International Property Journal - News and information on global property markets

After a dip in 2011, prices for houses in central London should jump by 33 percent by the end of 2015, Savills Research predicts.

While much of the U.K. will continue to struggle, “overseas wealth inflows and a strong private sector economy, particularly in the financial and business services sectors” will drive up London valuations, Savills says in its 2011 residential forecast.

After a long run of price increases and gaudy sales, the luxury London market is slowing down, new data shows.

In September, the average price for a home iin prime central London declined for the third consecutive month, according to the latest Knight Frank Prime Central London Index. In total, the index has fallen 0.7 percent since June.

That may not sound like crushing news, relative to activity in other markets. But London has been on a run of big sales, fueled primarily by buyers from Asia, Russia and the Middle East.

For jaw dropping prices and extravagance, Monaco is still the champ.

A used home in Monaco costs an average of 45,000 euro a square meter, or about $57,000, making the principality the most expensive market in the world, according to the latest Prime International Residential Review from Chesterton Humberts.

The nearest competitor was France’s St. Jean Cap Ferret at a relatively wimpy 32,500 euro a square meter, followed by London at 22,500 euro a square meters. (Even though London may lay claim to the most expensive home in the world, after the recent sale of the penthouse in One Hyde Park for $220 million.)

Pundits are already calling a London penthouse the “world’s most expensive home,” after it sold for £140 million, or about $220 million.

The six-bedroom apartment sits atop One Hyde Park, the opulent complex under construction in Knightsbridge. Developed by the Candy brothers and designed by Rogers Sirk Harbour + Partners, the four hexagonal towers offer 86 apartments, with prices starting at $31 million.

The number of foreign buyers in London has turned from an interesting footnote into a true phenomenon.

Overseas buyers now account for more than 50 percent of purchases, according to a report released today by Knight Frank, the property company.

In upper crust neighborhoods Mayfair, Kensington and Hampstead, international buyers accounted for 60 percent of prime purchases. For properties priced higher than £5 million, the percentage of foreign buyers is 68 percent, compared to 39 percent December 2008, according to Knight Frank's report.

The original Chelsea Barracks plan

A London court has ruled that Qatar’s sovereign wealth fund acted improperly when it withdrew support for a controversial Chelsea project after complaints from Prince Charles.

The case brought by CPC Group, the company controlled by high-profile luxury developer Christian Candy, has turned into one of the U.K.’s most closely watched soap operas, thanks to the role of His Royal Highness. The court ruled that Prince Charles’ intervention in the Chelsea Barracks redevelopment plan, which was being developed by CPC and Qatari Diar, was “unexpected and unwelcome.”

Asian investors are purchasing central London property in unprecedented numbers and now account for 20 percent of all new build sales, a new report concludes.

In the last year, buyers from Asia represented 49 percent of the homes purchased as investments, compared to only 36 percent from the U.K., according to the new international report from property company Knight Frank.

“While the market has returned to life, after it pretty much shut-down in 2008, current international investment demand is almost totally concentrated on London and is primarily coming from Asia,” said Knight Frank residential research director Liam Bailey.

While many markets continue to plod along, bouncing and churning in the bubbles of a partial recovery, primary central London prices are surging again, conjuring images of the boom years.

After a 1.4 percent bump in May—the 14th consecutive monthly increase—prime London prices are up 23 percent since last March, Knight Frank report. That’s only 6.4 percent below the market’s peak, achieved in March 2008.

Overseas buyers are helping lead the surge, the property company says. While U.K. residents have been hesitant to commit, foreign buyers, especially Russians, are taking advantage of the weak pound. The number of Russian applicants grew by 112 percent in the last two months.

For the second year in a row, Monaco ranks as the world’s most expensive residential real estate market, with prices averaging from $4,300 to $5,900 a square foot.

In fact, it was no competition. London was a distant second, with prices topping out at $4,400 a square foot, according to the just released 2010 Knight Frank Wealth Report. Paris was third, offering a relatively reasonable range of $2,400 to $3,300 a square foot.

NoHo Square was a fabled project in London, a boom era splash of decadence and luxury targeting the city’s growing international affluent class.

Promoted by the flamboyant Candy brothers, Nick and Christian, the plan was to turn the former Middlesex Hospital site in Fitzrovia into an array of offices and posh residences. Backed by Kaupthing, the Iceland bank, the Candy’s paid £175 million ($262 million) for the property in 2006 and won approval for an 890,000-square-foot development the next year, including more than 200 luxury apartments.

Now the site is nothing more than an empty lot, a symbol of an ambitious development that never happened.