Click here for the hard truth about the current job marketAugust 31, 2015 8:50
Rich Arabs rush to London homes
The city's attraction among Middle Eastern buyers heightened after the Arab Spring uprisings last year.
November 8, 2012 9:36 by Reuters
Middle Eastern buyers piled into London’s luxury home market in October as they shielded their wealth from political turmoil back home, including the Syrian civil war.
The trend is not new, but a sharp increase in buying last month suggests wealthy citizens in some Middle Eastern countries believe their security is continuing to deteriorate, even as politics become more stable elsewhere in the region.
Buyers from countries including Egypt, the United Arab Emirates, Israel and Jordan spent 50 percent more on London property in October than they did in the same month last year, paying an average 3.5 million pounds ($5.6 million), property consultant Knight Frank estimated.
Internet traffic from the Middle East to Knight Frank’s catalogue of homes in London’s priciest neighbourhoods, such as Mayfair and Knightsbridge, jumped 10 percent in the year to October.
“Things are precarious between Israel and its neighbours and the turmoil in Syria is frightening,” said Andrew Langton, chairman of high-end estate agent Aylesford International.
“People are wondering ‘where next?’…They realise they had better find somewhere else to live.”
London’s relatively stable political climate and transparent legal and financial systems have made it a target for many overseas investors looking to park their wealth. Prices for the best homes have risen 52 percent from a post-credit crisis low in March 2009.
The city’s attraction among Middle Eastern buyers heightened after the Arab Spring uprisings last year, which toppled governments in Egypt, Tunisia and Libya, and it has lingered via the civil war in Syria.
Political stability has begun returning to some countries, such as Egypt since June’s election of Islamist president Mohamed Mursi. But the latest London home buying figures suggest outflows of money may be increasing from some other nations.
In October, Lebanon’s intelligence chief was killed in a car bombing that the country’s political opposition has blamed on Syrian President Bashar al-Assad. Late last month Jordan said it had foiled an al Qaeda plot to bomb its capital.
A collapse of Iran’s rial currency in late September and early October, triggered by Western economic sanctions against Tehran over its disputed nuclear programme, may have accelerated capital flight from that country.
“Events such as the Arab Spring and the Syrian conflict have created more instability and uncertainty and you see greater demand from people looking for safe haven assets,” said Liam Bailey, Knight Frank’s head of residential research.
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