8 ★ FTWeekend 19 October/20 October 2019
House Home
orifrentalyieldsgrow,shesays.
Investors have started to look further
afield for stable returns, says Liam Bai-
ley, head of global research at Knight
Frank. “You get an increasing pool of
people around the world wanting
investment portfolios with diversified
riskbygeographyandsector.”
Over the next 10 years, Hudson
expects lower capital growth and lack-
lustre wage increases in the UK. Those
who buy two-bedroom flats in their
twenties orthirties will not be able toupgrade to houses as previous genera-
tions did. Price growth will be muted,
but affordability will remain a problem
for many. “Affordability issues will still
be top of the agenda in London and
otherglobalcities,”saysBarnes.
For renters, the next 10 years could
see the implementation of more rent
controls. Paris lawmakers introduced
such measures this year. In London,
mayor Sadiq Khan is pushing for
devolved powers to manage London’s
overheating rental market.There, the
average private rent for a one-bedroom
home is more than the average for a
three-bedroom home rental in every
otherregionofEngland.
For Heidi Learner, Savills US chief
economist, a bigger source of concern
are restrictions on cross-border capital
flows, such as those imposed by Chinaon outbound capital.The White House
is considering limiting financial invest-
ments between the US and China, too,
she says. “This could be harmful for real
estateingeneral.”
“A large number of cities like Vancou-
ver and New York have benefited from
capitalcomingoutofChina.Anyrestric-
tiononthesekindsofflowswouldhavea
negative [impact] for residential mar-
kets,”shesays.How will we live in the 2020s?
Part two| In the conclusion
to our series on theforces
that will shape how we live,
we look at investment,
technology and ageing.
ByAleksandra Wisniewska
‘Affordability issues will
still be top of the agenda
in London and otherglobal cities’
Housing will no longer be
4 asafe bet for investors
Sunny Mehat has been trying to sell his
two-bedroom apartment in Vancouver
for six months. It has not been easy. In
2016, prices in the Canadian city rose 30
per cent, but now it is a different story.
In the past year, prices have fallen by
more than 7 per cent, according to the
RealEstateBoardofGreaterVancouver.
“We had lots of interest but no one
decided to buy,” says the 41-year-old IT
manager. Mehat has lowered the price
twice, but he still keeps getting lowball
offers that he is not willing to accept. If
he does not receive an acceptable offer
in the next month, he will rent the flat
outandhopepriceswillriseagain.
Mehat may be waiting a long time.
In the past decade, low interest rates
and the relative ease with which wealth
has been able to move across borders
have transformed property markets in
cities such as Vancouver, London, New
York and Sydney. House prices were
inflated and luxury homes were built at
pace. But residents struggled to afford
highprices.
Now, many authorities are fighting
backwithtaxandpolicychangestocurb
demand. In Vancouver, for example,
provincelawmakersintroduceda15per
cent tax on overseas buyers in 2016,
sinceraisedto20percent.
As prices have fallen, investors are
rethinking their portfolios. Now prop-
erty “is not as safe as it used to be”,
says Neal Hudson, a UK property
market analyst. “We reached the end of
an era of capital value growth,” says
Yolande Barnes, chair of the Bartlett
School of Real Estate at University Col-
lege London. Withlow interest rates,
house prices can only rise with inflationechnology will changeT
5 verythinge
When online directory easyProperty
launched in 2015, it staged a mock
funeral procession through the streets
of London to announce the death of
the traditional high street agent. That
ill-judged publicity stunt backfired.
In the UK, online agent Emoov folded
last year while Purplebricks, which
operates a branch-free model with
self-employed agents, exited the US
market. According to a report by ana-
lysts TwentyCi, online and hybridIllustration: Joe BoydStory time in Channel 4’s ‘Old People’s Home for 4 Year Olds’OCTOBER 19 2019 Section:Weekend Time: 10/201916/ - 18:02 User:elizabeth.robinson Page Name:RES8, Part,Page,Edition:RES, 8, 1