Although Europe, US and Asia remain property hotspots for investment, Forbes is predicting the next big boom in Latin America.
Property hotspots for global investment
If everyone knew exactly where the property hotspots are in 2017, there would be no competition, of course, in the market. Even so, it is possible to draw some broad guidelines from a number of different sources – on the understanding that none is likely to guarantee property investment returns in any given part of the world.
Property investment is a typically long-term proposition, so although the opportunities for capital appreciation are of course important, you might want to consider the more immediate rental returns that appear to be available in the following continents.
Europe remains a strong hotspot for property investors, although there is likely to be considerable variation between one region and another. Tourist hotspots are likely to remain especially popular – and not just with British investors looking for a sunny spot near the beach. Montenegro, for example, is currently earmarked by the Global Property Guide as enjoying strong economic and tourist growth that has largely yet to filter through to the property market. Sound investments may be found at a still reasonable price.The International Monetary Fund (IMF) predicts that the country will enjoy an economic growth rate of 2.5% in 2017 (an especially impressive rate given overall conditions in Europe). Germany is Europe’s strongest economic performer and this has been reflected in an increase of some 23% in residential property prices, according to estate agents Knight Frank. While wages have largely kept up with increasing prices, rent levels nevertheless remain affordable.
In Britain, it has to be recognised that the Brexit vote has had a strong economic impact, not least as far as property prices are concerned. Yet any depression of prices, of course, raises the possibility of more bargains to be had. British investors, however, may be competing against those foreign buyers looking to cash in on the weakness of sterling, according to a story in the Wall Street Journal on the 19th of July 2016. With effect from 2017, British investors are also going to face the added costs arising from the removal of tax relief on mortgage interest payments for property bought either at home or abroad.
If past performance is anything to go by, Italy may also prove a property investment hotspot during 2017. The Daily Telegraph newspaper last year quoted the international property portal, TheMoveChannel, identifying Rome as a favourite, with Rome being the most sought-after place in the world. Italy hosts 11 out of TheMoveChannel’s top 50 hotspots, putting it on a par with the previous favourite Portugal.
The United States
According to American analysts Gord Collins, in an article dated the 14th of September 2016, the market forecast is for a strong housing market for 2017 and subsequent years. The country has lead the global recovery from the financial crisis of 2008 and this has also been reflected in renewed confidence in the property market.
According to the US news channel CNBC on the 6th of July 2016, there is a continued appetite for property amongst foreign investors, although it notes a trend away from high-priced, top-end property to more modest real estate. But it is a very large country, of course, so you might want to select your investment opportunities carefully. Los Angles, for example, is tipped by Knight Frank as a potential hotspot, where new retail developments, urban centres and leisure facilities are opening up additional new opportunities for property investors.
A similar story – driven by similar infrastructure developments – may be found in the Lower East Side of New York, especially around ever-popular areas such as Nolita, SoHo, and the East Village.
Despite its ageing and declining national population, Japan is attracting significant property investment in the capital, Tokyo. Prime residential areas in the city appear to be Chuo, Chiyoda and Minato. There are also relatively low taxes on your rental income.
Surprisingly, perhaps, the Telegraph newspaper identifies Mumba, in India, as a potential investment hotspot, where investors may enjoy high yields in some parts of this huge city. There are rent controls, however, and taxes are described as “moderate”.
The same source credits Bangkok, in Thailand, as offering high yields in a property market that is generally pro-landlord. A drawback, however, might prove the relatively complicated purchase process.
Vietnam is proving one of the strongest emerging markets, with a steadily more stable government and improving economic growth. It is only recently that the burgeoning property market has been opened up to foreign investors, say Knight Frank.
Previously sound economic development has significantly moderated in countries such as Colombia, Chile, Mexico, and Peru, where there might be some recovery during the course of 2017, but it seems almost certain to be on only a slow upward trajectory. Nevertheless, Forbes magazine identifies Latin America as the next prime hotspot for property investors, particularly in Chile, Mexico and Brazil.