Propertini reported a surge in UK property search traffic and engagement from Hong Kong and China in January. This is seen by experts as a trend of Chinese people making plans for property investment in the Lunar New Year.
Rhys Davies, Chief Operating Officer of Propertini, believes the high number of searches from Asia is driven by those who are keen to get prepared for the Chinese New Year of the Horse; “This includes planning property investments and for many others arranging accommodation for their children who may be studying in the UK,” said Davies.
Chinese New Year is the celebration which marks the beginning of the new lunar year when Chinese people are traditionally reunited with their family.
Davies says the property search users from mainland China and Hong Kong are exceptionally engaged in their property search compared to December. “The average time they are spending to view properties is just over 14 minutes per session which is over twice as long as in December. I suspect this shows a high level of intent and purpose to buy a property in the UK. I think UK real estate agents, especially in London and prime university towns, should pay attention to this trend,” said Davies.
During George Osborne’s trip with Boris Johnson to China in October, he set out to show that the UK welcomed Chinese students and the accompanying investment. “We already have 130,000 Chinese students like you studying in Britain. I want more of you to come”, said the Chancellor. He also underlined his position by clarifying, “let me make this clear to you and to the whole of China, there is no limit to the number of Chinese who can study in Britain.”
Joshua Miller, CEO of OKAY.com, a leading real estate firm in Hong Kong, said “In Hong Kong we typically see an uptick in the property sales activity around Chinese New Year and indeed we have seen this in January. Annual bonuses are often paid just after Chinese New Year, so these bonuses may go towards mortgage down-payments”.
The first event of Chinese New Year is the reunion dinner which occurs on Thursday 30th of January this year. Elfed Roberts, from the School of Business at The University of Hong Kong, explains, “it is traditionally a time when families make plans for the future. Planning for their children’s education is such an important part of this – especially in modern China”.
Paul Eden, CEO of award-winning developer Regal Homes, said, “We sell a large number of properties off-plan to Chinese investors and have seen a growing number of them looking to expand their property portfolio beyond their local markets.”
Indeed, last year saw China’s Wang Jianlin and Hong Kong-based Henry Cheng Kar-Shun rank first and second respectively in the UK Estates Gazette Rich List. However, will this trend continue? Currently non-residents are not liable to pay capital gains tax on UK property, but this is set to change in 2015.
Nevertheless, Eden believes the introduction of capital gains tax on UK property is unlikely to have a damaging effect on foreign investment. “The political stability in the UK is a continual attraction to overseas investors, while other eurozone countries are still recovering from the ongoing financial crisis, the UK property market is strongly considered to be a wise investment”, he said.
How will 2014 and the New Year of the Horse develop? Davies suggests, “at Propertini we’re continuing to see that with the growing information networks available, even real estate – the most local of all industries – is opening up to global capital flows”. With Osborne recently expressing his view “that there is no country in the West that is more open to investment – especially investment from China – than the United Kingdom is”, then perhaps January’s will become the busiest month for estate agents.