LONDON — London’s red-hot property market has struck a record with the sale of a $237 million unfurnished apartment, but even the developer of the opulent building warned that some asking prices in Britain were unsustainable.
Buoyed by the wealth of Russian oligarchs, Chinese tycoons and Arab sheiks, London has become one of the world’s most expensive markets, raising concerns ahead of national elections in 2015 that locals are being squeezed out of the market.
“We’re in boom-time prices, more expensive than we’ve ever been in the history of mankind,” said Nick Candy, one of the developers of London’s One Hyde Park luxury apartments, at the pinnacle of the capital’s super-prime residential sector.
“There is a concern over the market overheating,” he told Reuters. “Everyone thinks the main central London is doing so well, (so) the ripple effect is going throughout the UK, and some of the prices being achieved are probably unrealistic and not sustainable.”
But money is still pouring in, adding to concern about a property bubble in London.
Home prices across Britain have not recovered their levels from before the financial crisis struck in 2008, but they are rising at about 10 percent a year, prompting some top policymakers at the Bank of England to sound increasingly concerned about the risks to the broader economy.
A source familiar with the matter said an Eastern European buyer bought a penthouse at the One Hyde Park apartment block for a record 140 million pounds. ($1 = 0.5919 British pounds)
Britain’s previous record for an apartment was set three years ago by Ukrainian billionaire Rinat Akhemtov, who paid 136 million pounds for a penthouse and apartment at One Hyde Park to knock together into one property.
There have been more than $2 billion in sales at the block, whose developer is a joint venture between CPC Group and Waterknights, the private company of Qatar’s Sheik Hamad Bin Jassim Bin Jabor Al Thani.
Grosvenor Group, the landlord for much of London’s upmarket Mayfair and Belgravia districts, said Tuesday that it had sold off 240 million pounds in luxury residential properties in 2013 and aimed to reinvest in cheaper districts, as it was concerned that prices at the top end of the market were vulnerable.
Such is London’s wealth that property consultant Savills calculates 10 London boroughs now have an aggregate property value equivalent to the total value of Scotland, Wales and Northern Ireland combined.