In recent years, the real estate industry has changed and evolved. When turmoil strikes, real estate values plummet. However, this doesn’t mean there aren’t opportunities for the savvy investor.
Here are five ways to create growth in the real estate market when times are tough:
- Shrew and savvy wins the deal: In 2012, foreign investment in Turkey totaled $2.64 billion. Three years later, of the 1.3 million homes sold in Turkey, 20% were sold to foreigners. However, in 2016, political unrest in the Middle East has caused foreign investment to slow. That doesn’t mean that investment opportunities have disappeared. “Shrewd and savvy buyers are thinking ‘there’s a deal to be done here,’” Annie Burnett, from Luxury Property Turkey, told Mansion Global. As uncertainly continues into next year, Turkey will become a buyer’s market. Good news for those who once purchased vacation homes in Egypt and Syria and now will be looking to Turkey. Source: Mansion Global
- Reality vs noise: Speaking at the 2016 ULI Fall Meeting, Ben Breslau, JLL Americas managing director, and Joshua Scoville, Hines senior managing director of research, said there is a disconnect between news headlines and reality of the real estate market. As economists warn the end of a real estate cycle is near, Scoville says investors must look at individual markets, as each is on its own cycle. To survive to the next cycle, Breslau recommends investing in property and then holding it for a decade or investing in property where value can be added in the short term. Opportunity also can be found in markets where current real estate values are depressed. Source: Urbanland
- See Opportunity where others see distress: “In times of dislocation, in times of asymmetry, that is when the most opportunity presents itself to the people who are willing to lean in, to take chances and to have a prospective,” Ryan Williams told Forbes. Williams purchased hundreds of houses during the subprime credit crisis which he renovated and rented. He later founded a business which matches investors with real estate deals. Williams believes technology will revolutionize the real estate industry and those in the forefront will enjoy great opportunity. Source: Forbes
- Increased property value as currency values drop: The London real estate market has been hit hard by a number of factors: increases in property taxes, lower oil prices, turmoil in foreign investors’ home nations and Brexit. These factors have caused property values to drop an estimated 5% during the second quarter of this year and another 5% drop is forecasted for next year. These factors, however, will be offset by the drop in the Pound Sterling, which will make it possible for investors to purchase more expensive properties. These changes also have increased the interest in areas surrounding London. Source: Luxuo
- The bubble is about to burst: The Chinese government and financial analysts are concerned China is sitting atop a real estate bubble. To combat this, the government has placed restrictions on the market. Some cities have also made it more difficult for developers to receive funding and have adjusted mortgage payment ratios. Investors have reacted by investing in property in cities where values have increased slowly. China is half of the world’s gross domestic product, which means it remains a prime place for investment despite an uncertain future. Source: Fortune.
Top photo: © Getty Images / denphumi