2014 Property Investment Review
Last year was quite an interesting one in the global property market, with the two power houses of the West, London and New York, really underlining to investors the importance of investing into strong currencies as well as strong economies.
Both cities benefitted from price growth in central areas last year, with some locations seeing double digit upside on residential property values. The vacancy rates in these central locations remain very low, which is a strong indicator of a healthy market, although with the rate at which prices have risen over the past few years, yields in the typically favoured parts of Central London and Manhattan have suffered.
However the real property stories of last year in these markets were in the surrounding locations. A number of Outer London locations firmly emerged as worthy of investor consideration, and a similar situation was seen across the pond, with Brooklyn in particular showing healthy growth and strong potential to continue.
Another strong plus in each of these markets was the significant year-on-year increase in transactions from domestic buyers, which we always like to see – entering a market or sector that depends purely on demand from investors really narrows down your exit strategy options.
Elsewhere in the world there were a number of other positive stories for real estate investors. Dubai continued its excellent 2013 performance in the first half of the year, only to see a considerable slowdown in the summer amid fears and forecasts of a bubble soon to burst.
Nevertheless, the city still enjoyed property price and rental value increases of 15-20% over the year, and it’s clear that the inevitable decline and cooling down in property value growth coupled with a stalling of increasing rental prices was exactly what the market needed to remain viable and in good shape for long-term stability and security.
We also saw very good performance in Australia. Having watched most of the trials of the GFC from the sidelines, Australia emerged relatively unscathed and now stands as a booming economy that is ripe of profitable investment.
Strong growth has been seen across the countries three major cities, but the better value on offer in Melbourne and in particular Brisbane place them above Sydney as destinations on which investors would do well to keep an eye.
Written by: Gary Powell
Director – UK, IP Global
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