London's prime homes market defied the gloomy economic outlook and achieved sharp gains in 2011.
The on-going Eurozone debt crisis and the political turmoil in the Middle East turned out to have little impact on the city's high-end market, with prices reaching between £500,000 (S$1 million) and £20 million (S$40 million) last year.
Many analysts said money flowing into the London market came from Egypt, Greece and Italy, while the Russians and other billionaires continued to favour the city. Transactions were seen in Chelsea, Kensington, Knightsbridge, Hampstead, Mayfair, St John's Wood, Regents Park and other prime London boroughs. Meanwhile, price changes in other city areas were mainly mixed with small declines and increases.
According to price and yield indices of John D Wood & Co, which tracks sales from all leading agents and compiled independently by the London School of Economics and Nuffield College (Oxford), prices of homes larger than 3,500 sq ft climbed by 10.7 percent last year, an increase of 21.5 percent from its lowest point in 2009.
The performance of large prime area houses with built-up areas of more than 1,500 sq ft has been staggering. The index for apartment prices surged 24.9 percent, up 64.5 percent from an all-time low in 2009.
Though it was not confirmed, some said that money reportedly entered the market to avoid taxation. However, regardless of the reason, London prime property has become pricier than depressed US city properties. Related Stories:
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