I keep a keen, close eye on the global property markets. Here, I’d like to share my research and thoughts on current and predicted growth markets – and a little about why they are the destinations to watch. Aside from Dubai, where should savvy real estate investors be looking?
Sweden experienced a massive property price hike pre-Covid. However, despite the pandemic, the Northern European nation still saw an increase of 10.14% (9.79% adjusted for inflation) in its house price index in 2020, according to Statistics Sweden.
In Q2 2021, compared with Q2 2020, prices rose by 17% for one- or two-dwelling buildings at national level. Stockholm saw some of the highest rises – 11.5% year-on-year in 2020. Yet demand has fallen, and construction activity is low.
Sweden also enjoys some of the world’s lowest lending rates.
As we move further from the zenith of the pandemic, Sweden’s property market will remain buoyant this year. While high prices might make investment seem counterintuitive, the prices look set to remain stable, if not increase, and I believe demand will pick up in the coming years.
Meanwhile, neighbouring Norway is also looking sound in property investment terms. In a similar statistical picture to Sweden, Norway’s house prices increased by 12.5% year-on-year in June 2021.
In a similar statistical picture to Sweden, Norway’s house prices increased by 12.5% year-on-year in June 2021.
This growth rate puts Norway among the top growth markets, especially given its stable economy and high-income levels.
Again, despite COVID-19, the US property market has remained relatively resilient during this challenging time from an investment perspective.
Mortgage rates look set to stay low, which translates to increased demand for property – especially for active property investors. Los Angeles was voted the best city for real estate investment in 2020, moving up from seventh place in the 2019 AFIRE survey. Los Angeles is not only deemed a sensible choice for long term real estate investment by investors but an attractive place to live.
Los Angeles seems a credible choice for long term investments, with the county’s annual property tax Assessment Roll revealing a 3.7% growth figure for 2021. This Roll, an assessment of all taxable properties in the county, delivers a useful overall picture of the value and health of the this property market.
Given the vast size of America’s real estate sector, coupled with greater liquidity, suggests good investment opportunities remain. The US still witnesses higher growth than in European countries, more favourable cap rates and favourable debt financing.
London remains among the best global cities to invest in property.
London was voted the world’s top city for real estate investment back in 2018. However, post-pandemic, AFIRE’s (Association of Foreign Investors in Real Estate) annual International Investor Survey puts London at number four in the global rankings. That’s still impressive given the uncertainties created by both the pandemic and Brexit.
Latest statistics reveal that in UK market terms, London has seen the lowest annual growth (2.2%) for the eighth consecutive month, July 2021.
Alternative real estate investment opportunities
Turkey is experiencing real growth in its real estate sector, with CEIC data showing house price growth of 31% year-on-year (as of July 2021). This growth is fuelled by relatively low prices, an emerging economy and the geographical position as a gateway between Asia and Europe. So while some pundits are issuing caveats around investing in Turkey – especially noting the decline in value of the Turkish Lira against the dollar – I think it holds great appeal for many longer-term investors.
According to Turkey’s Real Estate International Promotion Association (GİGDER), the country will see a massive influx of some US$7.5 billion in sales to foreign investors this year, mainly from Russia, Iraq and Iran.
Meanwhile, the enduring appeal of Paris is perhaps bucking the trends. Property prices in the French capital are at an equivalent level to a year ago, according to the latest figures from Paris Chamber of Notaries’ (for June 2021) reported by 56paris.com. Second quarter 2021 transaction figures for Paris reveal a similar number to the same period in 2020 (33,000), but what stands out, according to the 56paris report, is that this figure is some 6% higher than the 10-year average for second quarters during the last decade.
Property prices in the French capital range between €10,600 and €10,800 per square metre – compared to Turkey’s US$1000 per square metre (€862 at the time of writing). In the second quarter of 2021, Paris’ property price per square metre stood at €10,650, a level similar to a year earlier (-0.2%).
What is abundantly clear is that the global property market remains buoyant, and favourable investment opportunities do exist but remember to undertake due diligence and carefully monitor the trends.