How currency rates affect property deals for expats

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London comes firs tin the global property hotspots for wealthy Asian families looking to invest in student housing, according to international property firm Jones Lang Lasalle.

Rich investors who can send children overseas for a university education often buy them a home while studying as an investment. – but they should consider the impact of currency fluctuations on property deals.

The choice depends on family ties, language and subjects studied as well as more unemotional investment criteria like value for money, yield and whether the country has a stable currency with competitive exchange rates.

More than a fifth of the London student population (22%) comes from China and India.

The other top placings are New York, where 46% of all students come from China, India and South Korea, and Tokyo – home to the largest number of foreign students in Asia, where nearly two thirds are from China, followed by Korea and Taiwan.

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Best of the rest in order of investment choice are:

  • Singapore
  • Shanghai
  • Los Angeles
  • Toronto
  • Sydney
  • Melbourne
  • Houston

“We have calculated the effects of currency movements on real estate returns, in ten Asia Pacific office markets for international investors, including those from the US, UK, and Euro area, as well as Japan, China, Australia and Singapore,” said Dr Megan Walters, head of research at Jones Lang LaSalle Asia Pacific Capital Markets.

Walters explains currency movement can impact on property investments and should be included as one of the factors for determining whether to buy or not.

The firm is also preparing a more detailed currency review looking at aspects of the office investment market.

“Currency movements can make a significant effect on real estate returns. For example, the annualised five year total returns in Australian dollars in the Sydney office market gives 6%. Currency movements result in doubling returns to UK investors at 16%, whereas it halves returns for Japan yen investors at 3% when compared to local investors returns,” she said.

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