What does 2008 mean for global property markets
The global property market for 2008 offers good and bad elements, depending on where you look and what you are looking for specifically. Many economic factors will play a significant role this year in the property trends we will see.
Yet, even in those areas struggling with housing prices falling, investors will still find a way to make an investment work there. The key will be to use each market individually.
First, The US
Beyond a doubt, the global property market is linked to whatever happens in the US. Most economists are predicting a small scale recession at the least for 2008. With foreclosures and the subprime market taking the forefront, there will be many opportunities for investors.
For example, several areas of the country are seeing incredible availability of homes below their market value. In Ohio, it was noted that foreclosed properties were selling for a 1/3 of their property value. Other areas include Southern California and Florida, with optimum prices in the real estate markets for investors able to take over these defaulted properties.
Still, there are likely to be troubles for the US property market. Both California and Florida are likely to see property values fall throughout the year.
Other countries will see this as well. Many will find that the housing slump will open the door for buying opportunities around the globe including in Australia, New Zealand and the UK.
Some areas will take the weight of the property crunch including Australia, the UK, and other countries that have been doing well. In Ireland and in Spain, the long term property boom is finally settling. Many believe that New Zealand's property boom is also coming to a close. While these areas may not fall too badly in the coming months, the boom is over.
Next, The Big Investor Countries
In the property market, several countries stand out as being the prime locations for investors to take their next move. For example, Brazil offers a fresh start for many investors, especially coastal towns here. Others include Montenegro, Malaysia, Panama and Vietnam. These areas are poised to be the next big investor hotspots. Strong economies, growing property values and overall stability will help them.
Central America is positioned to be a strong hold for many investors. Many of these investors that are long term investors not necessary in need of financing. Still, with strong economies and emerging economies, these countries, such as Panama and even the Dominican Republic, will see increased growth.
What About Credit Markets?
Perhaps the most worrisome condition for some investors is the failing credit or financing markets. Huge banks will face record losses in Australia, the US and throughout Europe. Their largest problem is the subprime lending problems in the US. In countries such as Australia, overinflated loans will cause many banks to lose money, as has already been seen.
Most of the credit problems will affect those looking to develop property more so than buyers in most areas. With banks tightening their belt on who they will lend to, most investors with the ability to qualify will be fine, while developers on risky investments may struggle the most. Economists have chimed in saying that this may not be so bad, considering fewer new developments may mean more focus on the current housing markets. This may help the current housing market to gain some stability in the long run.
More so, those that do not need credit to make investments will not be hurt by the credit crunch and may find more opportunities available to them in the global marketplace. This is especially true for those high end luxury markets that are developing at the hands of wealthy investors. They will continue to do well, mainly because property in those locations will continue to rise well and no credit is necessary to make investments happen.
Also important to consider is the exchange rate. As the US dollar weakens and European exchange rates become less than stellar, more money will move to Asia as well as Central America, where more can be bought for far less.
The Best For 2008
Looking towards the future of 2008, some countries will continue to do well. Canada has seen record growth in many of its larger cities. Interest rates and housing prices have helped to keep this housing market strong and will likely continue throughout the year.
In addition, Bulgaria looks great with its 2007 growth records at 30 plus per cent. Property values here continue to rise and do well in the long and short term. Cyprus is another good example for 2008 property growth. It too recorded excellent growth over the last year and it is positioned to sustain that growth through the coming year.
2008 looks like a prosperous year, assuming funds are placed in the right markets. Remember too that with home prices high in many areas of the world, second home buyers and retirees who traditionally would buy in the US, will look towards moving to overseas markets including those in Brazil, Bulgaria and Cyprus.