There is good news for the global property markets as we pass the midway stage of the year, with many on the way to recovery following the global economic crisis, but some countries will offer real estate investors a better return on investment than others.
According to the recently-released Global Property Guide: Mid-2010 Property Markets report, many countries are experiencing an upturn in fortunes and have successfully managed to reverse the downward trends experienced during the crash of 2006-07. Among the better performing locations are Hong Kong, Singapore, Taiwan, Australia, Israel, Finland, Norway, Sweden and the UK.
However, not all destinations around the globe have been successful and some, including Ireland, Bulgaria, Spain, Iceland, Slovakia, the Philippines and Greece, continue to be troubled.
We take a look at the findings of the report in relation to various parts of the world.
Overall, Europe is in a worse position than other regions of the world, as poor property yields, concerns surrounding a number of countries' high deficits and a falling currency mean that many markets are not offering a great deal of real estate investment opportunities.
However, Global Property Guide recommends that potential real estate investors look at Turkey, with its strong banking system, tourism growth, geographical position and competent government offering considerable potential.
This is a belief shared by a number of agents in the country. Stephen Worboys, managing director of Experience International, said that a shortage of housing is likely to lead to increases in rental yields and capital growth in Turkey.
The US is fast becoming one of the more healthy real estate markets in the world, with the economy continuing to recover at a rapid rate. Furthermore, the dollar continues to grow in strength against both sterling and an ever-weakening euro.
Residential investment in particular is starting to look like an attractive prospect for some speculators and many are returning to the market with more confidence than before.
However, there still remains a large amount of distressed property on the market, although the most recent figures from RealtyTrac show that this decreased during May.
James Saccacio, chief executive officer of RealtyTrac, said that the decrease was reminiscent of the trend which has been seen in previous months.
"Overall foreclosure activity [is] levelling off while lenders work through the backlog of distressed properties that have built up over the past 20 months," he explained.
Latin America is enjoying a period of economic growth, with a number of countries in the region, including Brazil, Panama and Chile, experiencing rapid expansion.
Added to this, improved central bank policies across the region mean that interest rates are in decline and therefore buyers are able to get a better deal on mortgages.
Rising tourism is also an important factor in the Latin American property sector. Buy to Let investors may be interested to learn that Brazil is expected to witness growth over the next few years, with over nine million visitors by 2014.
In addition, rental yields remain high in the aforementioned countries - something which is often viewed as an important measure of the strength of a country's property market.
Middle East and North Africa
According to the Global Property Guide, the Middle East is currently in a cycle and as such, recovery will not be experienced for a while. The property website does expect investors to increase their interest in the area in the near future.
Possible destinations for investment include Egypt and Jordan, where generous yields can be achieved in the countries' capital cities of Cairo and Amman.
Real estate and investment firm Jones Lang LaSalle claimed earlier this year that Egypt's capital city Cairo is benefitting from its growing economy and ideal location at the crossroads of Africa, the Middle East and Europe.
The report stated that there is an increasing demand for housing fuelled by the fact that there is a major shortage in all types of property.
Property is overvalued in Asia, with the report suggesting that two possible areas for investment are Malaysia and Thailand, although the latter has experienced political turmoil in recent months which is sure to put off the faint hearted.
The Global Property Guide report certainly suggests that things are looking a lot better in the world's real estate markets than they were a few years ago, with lower interest rates and higher government spending helping to get things back on track.
However, there are a number of upcoming phenomenons which could have an impact on future markets in various countries. The success of the European Union's bailout measures has the potential to affect numerous different member states, while the UK's Emergency Budget next week (June 22nd) should contain some interesting policies which are likely to interest those who have invested in property.
Further afield, political unrest in both Thailand and Hungary may have a profound effect on the recovering markets.
- Thursday 17 June 2010