You read a lot of predictions on the world's property market, and even more reports of price movements and how they may indicate a trend one way or the other. While most of them are ambiguous enough to be mostly right most of the time, they are almost all inherently wrong. This is because predicting for example whether the UK housing market will see prices rise or fall is nearly impossible, because of the massive differences between each region, and indeed each town/city.
That said, the world of indicators will always be ruled by the average and the percentage, if the average is rising then the picture is usually improving, or at least, no longer worsening. Plus, they are a lot of fun to write and to read, and often important to those considering investing in residential property. So here goes, I will now attempt to paint a picture of trends in the international residential property market.
Without a doubt, the residential market has been on more of a rollercoaster than any others; a crash in the US sub-prime mortgage market spread contagion throughout all of the world's banks that were exposed to the US mortgage market crippling liquidity and toppling property markets on a global scale. If anyone knows of a country that wasn't enduring a property crash and economic recession by the end of 2008 Then in 2009, spurred by massive amounts of cash being injected by global governments we saw property markets recovering strongly in most countries. This bounce continued in the first half of 2010, before running out of steam in most countries as government stimulus turned to austerity.
So, what of 2011. Well, the government stimulus is now withdrawn in most cases, the austerity has all been revealed in most cases and global residential property prices are down 17% on average according to Knight Frank. Economies are recovering in most countries, employment is rising and interest rates are at an all time low in many countries. On the other hand the banks are still in disarray, and mortgage lending in most countries is still at a bare minimum.
In the Knight Frank Report titled Global Residential Market Forecast 2011 the firm states: The post-crash bounce in global housing markets is set to slow considerably in 2011. However, lower price growth across the world masks improving fortunes in Europe and a more sustainable rate of market performance in Asia.
The consensus of opinion among analysts is that the slowing and stagnation of the second half of 2010 will continue into 2011, but that there will be some excellent residential property investment opportunities for cash-buyers with the know-how to find them. For example below market value properties in the UK; because of the massive amount of foreclosures and the fact that mortgages are impossible to get without at least a 5% deposit, demand for rental property in the UK is soaring. Thus, those with the cash to buy distressed properties at bargain prices and make them rentable are able to make really solid yields.