luxury resi looking shaky?

Apr 17th, 2013 | By | Category: House Key, Residence

Luxury London House Price Growth Is Unsustainable Says Grosvenor Group Chief

In an interview with Reuters Grosvenor’s Chief Executive Mark Preston voiced concerns over the unsustainable growth of luxury house prices in London.

Luxury house prices have surged 53 percent since 2009, compared with 25 percent in Greater London, as investors sought refuge from Europe’s debt crisis, and political uncertainty in the Arab world and Russia, property group Knight Frank said.

The buoyant market has since attracted a slew of commercial developers such as British Land and Land Securities while Grosvenor has also cashed in by converting offices back to their original use as homes.

The Grosvenor group own most of London’s upscale Mayfair and Belgravia districts. The groups portfolio comprises of 300 acres of Mayfair and Belgravia with more than 1,500 homes, shops and offices, with the value of the groups assets standing at £5.8 billion pounds. Despite these impressive figures Mark Preston said “The extremely high rate of growth over the last two, three years is a thing I’m concerned about and I think it’s probably unsustainable,” Preston also went on to say “we’re reaching values in prime London that are just extremely high by historic standards.”

With more luxury properties being built in the capital it will be interesting to see how the market will react and as we all know every bubble eventually bursts.

Interview with Mark Preston courtesy of Reuters.com.
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