Property investment in emerging nations for expats in 2014…
Last year's global investment surveys indicated a significant uptick in international capital flows, portfolio restructuring and increased buying activity in 2014. Now that we are here, where are the 'goldmines' for expats, what factors are driving markets and which property types stand out?
New Investment Principles for Real Estate in 2014
Many of the once most ‘promising' exotic hotspots of before the crises appear to have dropped off of the global investment radar altogether.
While confidence is up and the property recovery is being proven in hard numbers, not just optimism in the media, institutional and expat investors, as well as lenders are demonstrating an increased appetite for acquisitions and risk.
Recent lessons not being forgotten, the current focus among most property investors is on above average yield, with strong growth potential, without taking on unnecessary risks or sacrificing wealth preservation.
Rather than mining exotic new locales in Africa, Eastern Europe or new islands, experienced investors are paying more attention to proven countries, with reasonable taxes, and predictable government.
If anything, the theme of investment in real estate in 2014 is more re-emerging markets.
One Emerging Trends in Real Estate 2014 report sums up the best strategy as "Find the right market and the right partner, execute quickly, don't miss an opportunity—and invest one deal at a time."
Major 2014 Property Market Drivers
In addition to pivoting from being on the defense to more aggressive acquisition strategies, capital flow and changing demographics are expected to play major roles in property performance and which destinations realize the most activity, rental rate increases and equity growth.
The aging of the Baby Boomer generation will continue to push many to warmer climates. Analysts anticipate this year will see even more emphasis on sourcing sunny locales with superior healthcare such as Kuala Lumpur and Florida.
Barely a day goes by without another media headline on how Generation Y is now entering the property market as a distinct force, with distinctive tastes. Specifically office, retail and housing trends for Millenials appear to collide in dense urban areas with plenty of mixed use property, and proximity to amenities being a top priority.
PwC's annual forecast comments that global direct investment in real estate is virtually back to pre-crisis levels, with "much of it from Asia".
Summing it up; expats should expect to see urban infill and redevelopment absorb a significant amount of attention and international capital over the next few transformational years.
Pay Dirt – Where To Uncover Re-Emerging Urban Diamonds
A 2014 Urban Land Institute survey of over 1,000 of the most sophisticated and influential leaders in the property industry placed both Miami and New York City in the Top 10 Markets to Watch. Most notably, Miami leapt up significantly on this annual list from 2013.
Malaysia continues to stand with Kuala Lumpur as its flagship city. According to the U.S. National Association of Realtors (NAR) the draw includes health care, which is attracting medical tourism, excellent technological infrastructure and low cost of living. While some property prices reflect this premium location's high demand, new LRT expansions are providing a balance in amenities and affordability with increased growth prospects.
A January 2014 Property Wire report found 51% of industry experts surveyed now see "good buying opportunities in Ireland". The Wall Street Journal reports Ireland's Society of Chartered Surveyors and IPD data show 2013 as the turning point in the Irish property recovery, with values finally rising 3.2% after six years of declines, during which prices plummeted more than 65%.
Then there is the long awaited revival of greater London property markets which are anticipated to see faster growth than Central London, and deliver superior returns as expats seize opportunities to invest in real estate before new tax laws go into effect.