London has managed to remain the most liquid and transparent property market in the world, according to CBRE and JLL.
In the most recent Investment Intensity Index comparing the volume of direct property investment over a 3-year period in contrast to the current economic size of global cities, figures have proved that London is still number 1 next to Tokyo and New York. Other global cities with good real estate standing are Paris and Munich.
Economists say that there is a relationship between the size of a city’s property supply and the volume of investments that come each year.
Other notable key findings among highly “liquid” property markets are:
Scalable and fast-growing tech cities are one of the top choices among property investors. Cities such as Munich, London, Copenhagen, and Los Angeles fall under this category.
Paris ($342bn) and London ($334bn) are the largest property markets in Europe.
5 cities in Europe: Paris, London, Madrid, Milan & Munich represent $1 trillion of investable property on a global scale.
London is viewed as the most transparent property markets in the world.
TOP 3 CITIES: MARKET SIZE vs. PROPERTY INVESTMENT INFLOW
These cities hold an average turnover of at least $10bn and therefore fill the top 3 spots: London (8.6%), New York (7.1%) and Dallas (7%). Again, London bests the other cities in terms of stock traded annually.
The amount of property supply in each market is important to investors who are looking to globally diversify their portfolio. According to CBRE Global President, Chris Ludeman, “A true market neutral portfolio needs to be weighted by city size. Most investors are not pursuing full global diversification, but many have a more tightly defined strategy such as ‘core real estate in global gateway cities.”
Global investors see liquidity as a crucial factor when choosing an area. International investors composed of 94% of all London property sales in Q3 2017 because of the city’s transparent and liquid market. It is these features that provide a substantial competitive advantage and are important indicators of successful markets that can compete globally.