THE strengthening of the US dollar is expected to eventually benefit property investors, according to Knight Frank’s Global Currency Report 2017, which analyses the impact of currency movements on residential markets around the world.
The expansionary fiscal policy in the United States could bolster economic growth and International Monetary Fund’s economic growth forecast to 2.3 per cent this year from 1.6 per cent last year, the report stated.
Knight Frank’s Attitudes Survey reveals that international property investments and portfolio diversification are some of the most important investment decisions for ultra-high net worth individuals (UNWHIs).
Portfolio diversification ranks as one of the top five most important factors for UNWHIs, and for the next two years, 32 per cent of UNWHIs would look to invest in prime residential property outside their country of residence.
While movements in currency markets could be significant to overall returns, it is important to consider these alongside fundamental market indicators, such as price performance and yield, as lacklustre performance here can offset shifts in the US dollar.
The depreciation of the ringgit has not had much impact on Malaysian investors in overseas market, says Knight Frank Asia-Pacific research head Nicholas Holt.
He said Malaysian investors are still focused on three markets — the United Kingdom, Australia and Singapore — and this trend is expected to continue.
“Over the last 12 months the ringgit has looked healthier, so it all depends on which market you want to invest in.
“The ringgit against the UK currency seems to have progressed over the last one year, so it can be a good time to buy now in London, as compared to a year ago,” Holt told NST Property.
He said people buy houses in the UK and Australia for various reasons that include lifestyle, education and portfolio diversification.
“We do know that university education is a big drive in the UK and Australia. As for Singapore, it is a lot closer to Malaysia, so there might be other reasons why Malaysians buy properties there,” he added.
Holt stressed that the UK has traditionally been open in its policy relating to potential property buyers, where they are allowed to buy properties in the country on the same terms as a UK citizen.
“The whole market is open to foreign investors and you can buy anything. The UK is also considered a safe haven for property investors.
“(As a) safe haven, it essentially means that in times of uncertainty or instability in the financial market, or when there are political risk campaigns, investors tend to look into bricks and mortars to be safe.
“They put their money in cities that are safe and have good transparency, and the London property market is just one of them,” he said.
Knight Frank provides high-quality professional advice and solutions to cover all needs of overseas property owners, with Malaysia-based Dominic Heaton Watson as its point of contact to liaise with local UK experts.
For new properties below £500,000 (RM2.8 million) in London, Knight Frank has in its listing the Fellows Square, Edgeward Road — a 117-unit apartment due to be completed between July and September next year. Starting from £410,000, the project is close to Wembley Stadium and Gladstone Park.
Other projects include an apartment block in Rivermill Lofts, with a riverside surrounding and priced from £317,000, as well as the Royal Docks West, Western Gateway apartment at the heart of a £3.7 billion regeneration scheme in Custom House and Canning Town, which is priced from £389,000.