But new high-end towers will continue to flood the market.
After decades of mind-boggling growth, home prices in metropolitan London, according to official numbers, started to fall this year, if barely. Between March and September, they slid 2.3%. But it’s a lot worse in the most expensive parts of the city: Prices in central London have already dropped 15% since 2014, according to James Hyman, head of the residential agency division at Cluttons. He expects another 7% drop over the next year and a half. And the total volume of transactions has fallen by a fifth, according toResidential Analysts.
In 2014, a change in the stamp duty made buying high-end homes in the UK more costly. In London, the city that hosts the highest number of super-rich individuals per capita in the world, high-end homes are the staple product. And it’s getting harder and harder to offload them: The Guardian reportedthat over half of the 1,900 ultra-luxury apartments built in London last year failed to sell. This freeze at the high end is fueling concerns that the city would be left with dozens of “posh ghost towers.”
The newest phantom skyscraper is London’s Centre Point Tower, a 33-story office building from the 1960s that was recently converted into multi-million-pound luxury apartments. But demand is anemic and the developer behind the project, Almacantar, has all but given up trying to sell the flats after receiving too many “detached from reality” lowball offers. Until conditions improve, half of the tower’s 82 flats will lie empty.
Yet even as demand for upscale real estate in London fades, there’s little sign of any slow down in the construction of luxury apartments, meaning there will be an even greater glut of upscale real estate in the near future…