Nov 1 - Property prices in a number of capital cities are booming, prompting fears a bubble might be forming five years after the global financial crash. Hayley Platt looks at how house prices in London, Lagos and Dubai have rebounded.
London's property is among the most desirable and expensive in the world. It's estimated prices in parts of central London have rebounded 64 percent since a low in March 2009 - during the global crash. Properties beginning at the £2 million mark and beyond are being snapped up by overseas investors keen to own a piece of the capital. But some working in London's investor community fear unintended effects, even if not all see a bubble forming just yet. Jeremy Stretch of CICB. SOUNDBITE: Jeremy Stretch, Head of FX Strategy, CIBC, saying (English): "Investors have preferred or favoured buying real assets here in the UK, i.e. London property, and of course it's all very well to encourage those net inflows but of course it does have some dynamic consequences, pushing up prices and also raising this issue of perhaps closing or needing to close out an anomaly in terms of second homes and capital gains." Britain encourages foreign investment. Last week Prime Minister David Cameron said the UK would become the first non-Muslim country to issue an Islamic bond. But it's considering imposing capital gains tax on overseas investors who own British property. Could it put other foreign investors off? SOUNDBITE: Jeremy Stretch, Head of FX Strategy, CIBC, saying (English): "I think the City view is probably still that provided the taxation measures are relevant and or not injudiciously put together then I think that shouldn't cause major structural problems for the UK and shouldn't encourage a divestment of some of those net inflows that have been boosting the property market." London isn't the only capital city getting a boost from property. Investors are also clamouring to buy in Lagos, thanks to a growing consumer market and Nigeria's increasingly affluent middle classes. And property prices in Dubai have jumped more than 20 percent in the last year. It's now a frontrunner to host the 2020 World Expo which attracts millions of visitors and could trigger billions of dollars of fresh investment. ///