The past year will go down in history at once several political events of a global scale that could not but affect the global economy and business. The real estate agency website tells what to expect from the world real estate market in 2017 and where to invest already today.
The hottest markets: the USA, Asia and Europe
The largest global real estate markets in 2017 will be Vietnam, Germany, India and the United States. Among the cities will continue to actively develop Barcelona, Bangalore, Bangkok, Budapest, Los Angeles, Madrid, Manila, Mumbai, Istanbul, Ho Chi Minh City, Shanghai and Shenzhen.
The US market will attract new investors, as the profit from capital will grow with the strengthening of the dollar. At the same time, real estate will remain one of the best instruments for hedging inflation risks.
In an actively growing Asian region, India should be highlighted: the country’s economy with one of the highest growth rates in the world attracts the largest investors. Among other arguments in favor of choosing a local market for investment – the growth of households, relatively low debt on loans to the population, strengthening the financial market and lower interest rates.
As for European markets, experts predict that rates will remain low for a long time. This will attract not only new international investors, but also a greater number of local buyers.
Popular types of real estate for foreign investors
Despite the political changes that have affected the behavior of real estate buyers for leasing in some major markets in 2016, Tranio experts still expect positive dynamics in this segment in Europe and North America: in some locations, the yield may reach 32% . For example, in the USA it is the southeast and the middle west – the cities of Atlanta, Tampa, Chicago and Pittsburgh.
Also in 2017, an increase in interest in commercial real estate with short-term leases is expected: with the growth of inflation, investors will be able to revise rates relatively often.
In more stable markets, businessmen interested in short-term investments (for two or three years) should pay attention to redevelopment projects. In Spain and Germany, where demand for residential real estate remains stably high, the profitability of such projects will be up to 15%.
Changes in the regulation of real estate transactions for subsequent leasing, as well as procedures for obtaining mortgages, imposed additional restrictions on investors in certain markets. For example, in the UK, increasing the stamp duty and tightening the conditions for obtaining real estate loans for subsequent leasing have become a cause for concern among many foreign investors.
In the US, a sense of uncertainty is fueled by President Donald Trump’s unclear plans for reforming the tax system, in particular his position on deducting interest on mortgage loans. Experts recommend that investors closely monitor reports on new initiatives in Trump’s tax policy in the first 100 days of its term.
Another trend that is gaining popularity in the financial sphere is lending between individuals. Online services allow you to directly connect creditors and borrowers, perform thorough data verification and are often able to generate notifications or reminders of payments themselves.
It is likely that such platforms can soon become an alternative to traditional banks. At the same time, it is worth remembering that P2P-lending systems can not guarantee users the same security that banks provide, because borrowers who decide to turn to such services should take all measures to protect their capital.
Programs of residence permit
The US program to attract foreign investors EB-5 has repeatedly been the subject of controversy in 2016, and in December Congress again postponed the vote on it, leaving the last word for the administration of Trump.
European countries have shown great activity in the modernization of visa programs. For example, the threshold of investment in real estate in Cyprus, necessary for obtaining local citizenship, has been reduced: from 2.5 to 2 million euros.
“At the same time, to get a temporary residence permit in Cyprus, you can buy real estate of any value, and permanent residence permits receive buyers of objects more than 300 thousand euros”, explains Tranio expert Julia Kozhevnikova.
Thus, buying property in Cyprus remains one of the easiest ways to get an EU passport for foreign investors.