By Ashwinder Raj Singh
The global economy is expected to grow by 3.5% in 2018 compared to under 3% in 2016. This encouraging trend suggests more vigorous economic activity, rising incomes and a keener appetite for real estate investments – not only within India, but on international markets, as well. Indians have historically been enthusiastic investors into properties abroad. They know that purchasing real estate in a foreign country helps diversify one’s financial portfolio and can ensure superb capital growth and guaranteed regular rental income in the right markets.
Also, owning a home in a country of one’s personal preference is an unbeatable lifestyle option, making that country a perfect destination for leisure activities.
Given the importance of such investments, it is critical that one understands the most suitable potential hotspots for property acquisition abroad. Here is a continent-wise breakdown for residential real estate investment that can generate exciting returns in 2017:
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United States: The American economy is expected to grow by 2.1%, and all major economic indicators are strong as well. This would point towards a convincing recovery from the 2008 recession, and signals increasing investor demand for real estate. It bears mentioning that America is currently becoming more favourable for modestly-priced affordable properties rather than high-end and luxury homes. Los Angeles is one of the cities considered to be leading from the front, while the Lower East Side of New York also presents an attractive proposition for investments into this housing category.
Europe: The perennial favourite of tourists from across the globe despite a few aberrations, Europe is going to be potentially strong in terms of real estate investments. For example, Montenegro – a country growing at 2.7% and an extremely attractive tourism destination – can be considered to be a hotspot for 2017. Since there isn’t a lot of awareness about this country, property prices are still modest and attractive for early-mover investors. Germany, the strongest economy in Europe today, has seen a rise of 23% in residential prices and is without doubt a tremendous opportunity for residential property investors. The UK, despite Brexit, is still a good bet as the property prices are softening and the economy may witness a modest downturn, thereby making it attractive for investors. Italy is another country with great investment potential, with Rome topping the charts. Finally, Portugal can be considered too given the extremely attractive prices of built-up real estate in the country.
Asia: Owing to lower taxes on rental income and various other factors, Tokyo in Japan is proving to be an interesting real estate investment destination. Bangkok in Thailand is yet another market that offers high returns on astute real estate investment. After the country opened its gates to foreign investors, Vietnam has suddenly come on the radar of attractive realty destinations, with improving economic growth and a stable government proving to be additional USPs.
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Latin America: Global economic watchdogs have predicted countries like Chile, Mexico and Brazil will come onto the path of sound economic recovery in 2017, thereby making these countries very viable alternatives for real estate investment.
New Zealand: This country ranks number 2 in the world on the International Property Rights Index. Even though property is not cheap there, the sparse population and growing economy mean that there is less competition and the chances of investing in plum properties are very favourable. New Zealand is an excellent choice for investors looking for enough room to grow and averse to the thought of fighting space in a crowded market.
Turkey: Turkey has been in the news for all the wrong reasons recently, but its strategic location between Europe and Asia makes it an indubitable property investment hotspot. It has been a business and trade hub for centuries, and the current unrest and slowdown in economy in fact makes the country quite viable for long-term investments.
Real estate investment predictions for global markets are always subject for variances. However, if one considers economic trends and the basic broad fundamentals and parameters of property investment, it is quite possible to identify regions in the world that can offer good returns on realty investments. At all times, the astute international property investor must study an identified market minutely, understand the trends driving supply, demand and price growth, and become familiar with the country’s own rules and regulations for foreign investments.
(The author is CEO-Residential Services, JLL India)