London's star shines bright

Measures intended to cool the British luxury market have failed to curb Asian appetites for prime London property. Flats upwards of £1 million (HK$12.4 million) almost walked out the door at a release this month in Central, far exceeding the developer's expectations. One penthouse sold for £7.5 million, a new high for Fitzroy Place in Fitzrovia.

Daniel Van Gelder, co-founder of developer Exemplar Properties, says he was overwhelmed by the response in Hong Kong, which netted £25 million of sales in one weekend. "[Market intelligence] told us we would never sell flats over £2 million here. We were delighted that despite recent changes to the stamp duty and land tax regime, we were able to sell so many flats above that price and even a penthouse."

In May, at the initial launch of Fitzroy Place in Hong Kong, Singapore and Malaysia, deals were signed on 120 flats, including 45 to British buyers who travelled to Asia for the launch. The scheme is well ahead in terms of sales projections, while two-thirds of buyers are owner-occupiers. Among them are Hong Kong buyers who, some say, are buying now to secure a London base when their children are at university.

It's an oft-repeated story. Global economic uncertainty is fuelling demand for luxury bricks and mortar, and safe havens appeal to cashed-up Asians.

Not all prime markets are benefiting from the global economic uncertainty. In Paris, usually a perennial favourite for overseas investors, buyers are adopting a wait-and-see attitude, according to Knight Frank.

London, in contrast, was one of five cities globally to record double-digit growth in the third quarter. Knight Frank cites the British capital as one of the cities increasingly considered investment hubs for high-net-worth individuals. Another price rise of 0.8 per cent in October took the annual growth rate to 10.1 per cent and, as Knight Frank notes, prices are now 52 per cent higher than in March 2009.