London is an international property market. I would personally rank it in terms of availability and vibrancy ahead of even those cities labelled as most liveable in the world such as Melbourne or Sydney. Given a choice between a UK degree or an Australian one, I can safely say UK is still ahead. Think Cambridge or Oxford or even LSE? Yes, I noted on University of Melbourne or Sydney. Of course, the largest group of property buyers for all these should be Chinese from China and even with the current hiccup with China’s economy, they remain the biggest. In Melbourne, the percentage is over a quarter. Crazily hot. 28% of Melbourne apartments bought by foreigners
The latest numbers are however not that healthy for Londoners, especially those who may not be earning enough for a home within London. A research by estate agency Stirling Ackroyd based on its own data and Land Registry figures for prices paid found that of the 279 postcode districts in Greater London, 51% (142) of them has an average price of at least £500,000. Before anyone reply that their salaries are HIGHER, well, the current median salary in London is £48,023. Source: Office of National Statistics Annual Survey of Hours and Earnings. In brief, it simply meant that London’s property market is severely unaffordable. To be affordable, the median property price should be nothing more than 3 times the median salary. (Yes, the property prices in hotspots in KL are definitely also ranked as severely unaffordable too)
If we believe that the property market Malaysia would continue to grow in terms of attractiveness and becoming even more international, I think it’s very clear that London is a very good benchmark instead of HongKong or Singapore. Assuming Greater KL is 10-15 years behind London property market of today, I think we have to start to be serious about property investments here in Greater KL. When I studied in Bristol, I met many of my university mates from other smaller cities in London. What this tells me is that London is the magnet for all the smaller cities and urbanisation meant London is a main choice, just like here in Malaysia where the first city we would think about for career growth would be Kuala Lumpur.
There’s no need to ask for a more accurate prediction of when KL’s property price would reach the unaffordable levels of London. It’s best to start understanding if we have enough financial capital and understanding to think big, start small. It’s unlucky to buy the wrong property somehow but to be ignorant of the potential with the greater KL property market will be disastrous too unless we intend to just work, save lots of money and move back to our little hometown when we need to retire. The best solution is still to buy something to stay and then sell it when we need to leave. Most of the time, unless we are truly unlucky, we should have some profits from it. Happy believing.
written on 7 Feb 2016
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