The latest global property research shows that property prices are up 4.7%, sparking concerns of a renewed global property bubble.
Many market investors and commentators are concerned by the latest property market predictions, which suggest that housing prices will reach records last seen before the global economic crisis. On the one hand, major markets such as the US and UK have seen significant rises in property prices, while on the other, there are certain trends in other markets, such as Greece and Spain, that bode well for property investors.
It is also predicted that the support mechanisms certain governments put in place to kick-start their economies, following the financial crisis, will come to an end.
Global government’s market supports, such as cheaper lending made possible by lower interest rates, which have helped drive property prices up in markets such as the UK, resulting in higher returns for investors, are beginning to disappear. This is as a result of a less than favourable economic outlook in some of the major economies in Europe. So not only will prices be driven higher in these markets, but property market predictions also point to it being more difficult to finance developments and investments in these markets.
Taking a look at some of the latest property predictions as we head into 2016, it is clear that there are certain markets that should be avoided while others still offer great value for money.
High demand, higher prices
The global demand for housing remains high. In markets such as the UK, property prices have risen by as much as 35% since 2009, according to certain property market predictions, house building is failing to respond. According to the same report, a mere 140 000 homes were built in the year ending March 2014, way below the norm. House prices are forecast to rise by 25% in the UK over the next five years, and are predicted to become even more unaffordable, mainly due to this shortage of homes for sale.
Offshore buy-to-let market on an upswing
Spurred on by the high demand for property, buyers and investors have set their sights on other global markets that offer more favourable prices. For those property investors looking for a solid strategy going forward, property market predictions suggest buying now in these markets to miss the inevitable bubble. Markets such as Cape Town in South Africa, and the Costa Blanca in Spain are offering great value for money, especially for investors looking to make gains in the buy-to-let market.
An underperformer in recent years, the buy-to-let market is likely to show increased activity to satisfy the rising demand for housing. Tourist hot-spots like Cape Town and Spain’s Costa Blanca continue to attract foreign investors because of their favourable exchange rates, and the ease at which purchased property can be rented out to holidaymakers. This makes owning one of the many available villas in Calpe, Costa Blanca, more economically viable and profitable than say for instance buying property in the UK.
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