Global Real Estate Market Report 2023: Comprehensive Analysis and Forecasts
The global real estate market is a dynamic and ever-evolving industry that plays a crucial role in the global economy. As we look ahead to 2023, it is essential to gain a comprehensive understanding of the current state of the real estate market and make informed projections for the future. This article delves into the intricacies of the global real estate market, providing a detailed analysis and forecasts for the year 2023.
The global real estate market has always been a significant contributor to economic growth and development. In recent years, it has witnessed remarkable transformations driven by various factors such as economic trends, demographic shifts, technological advancements, and environmental concerns. The year 2023 presents an exciting landscape for the real estate market, characterized by new opportunities, challenges, and trends that shape the industry.
Factors Influencing the Global Real Estate Market
The global real estate market is influenced by several key factors that impact its performance and growth potential. These factors include:
Economic conditions, such as GDP growth rates, interest rates, inflation, and employment levels, significantly impact the real estate market. A robust economy fosters demand for both residential and commercial properties, attracting investors and driving market expansion.
Demographic factors, such as population growth, urbanization, and changing household structures, have a profound impact on the real estate market. Understanding the preferences and needs of different demographic groups helps shape investment strategies and market offerings.
Technological advancements have revolutionized the real estate industry, leading to improved construction techniques, smart homes, virtual property tours, and digital marketing platforms. Embracing technology is crucial for real estate companies to stay competitive and meet evolving consumer expectations.
Increasing environmental awareness has influenced the real estate market, with sustainability and energy efficiency becoming key priorities. Green buildings, eco-friendly practices, and renewable energy integration are gaining prominence, providing opportunities for innovation and investment.
Government Policies and Regulations
Government policies and regulations play a vital role in shaping the real estate market. Policies related to taxation, land use, zoning, and urban planning influence property prices, market liquidity, and investment attractiveness.
The global real estate market exhibits significant regional variations in terms of market dynamics, trends, and investment opportunities. Let's explore the key regions and their characteristics:
North America boasts a mature real estate market, with the United States and Canada leading the way. The region offers stable economic conditions, diverse investment opportunities, and a well-developed infrastructure. The residential sector remains strong, driven by population growth and urbanization trends.
Europe's real estate market is characterized by its diversity, with variations in economic conditions, regulations, and cultural factors across countries. Urban centers like London, Paris, and Berlin offer prime investment opportunities, while emerging markets in Eastern Europe show great growth potential.
The Asia-Pacific region is witnessing rapid urbanization and economic growth, driving demand for real estate. China, India, and Japan are the key players in this market, offering vast investment potential in both residential and commercial sectors.
Latin America presents a mixed real estate landscape, with countries like Brazil, Mexico, and Argentina showcasing diverse opportunities. Emerging middle-class populations, urbanization trends, and favorable government policies contribute to the growth of the real estate market in the region.
Middle East and Africa
The Middle East and Africa region exhibit varying real estate markets, with countries like the United Arab Emirates, Saudi Arabia, and South Africa standing out. Rapid urban development, infrastructure projects, and increasing foreign investments shape the market dynamics in these countries.
The global real estate market can be broadly segmented into several categories based on property types and usage. Let's explore these segments:
Residential Real Estate
Residential real estate encompasses properties intended for personal use, including houses, apartments, condominiums, and townhouses. Factors such as population growth, urbanization, and lifestyle preferences influence the demand for residential properties.
Commercial Real Estate
Commercial real estate refers to properties used for business purposes, such as office buildings, retail spaces, and industrial parks. Economic conditions, business expansion, and consumer trends impact the demand and profitability of commercial properties.
Industrial Real Estate
Industrial real estate includes properties used for manufacturing, warehousing, and distribution purposes. The rise of e-commerce and global supply chains has increased the demand for industrial spaces, particularly in logistics hubs and key transportation corridors.
Hospitality and Tourism Real Estate
Hospitality and tourism real estate comprises properties such as hotels, resorts, vacation rentals, and hospitality infrastructure. Global travel trends, tourist arrivals, and destination popularity influence the growth and profitability of this sector.
Emerging Trends and Technologies
The global real estate market is experiencing several emerging trends and technologies that are reshaping the industry. These include:
PropTech, or property technology, refers to the use of technology and innovation to enhance efficiency, transparency, and convenience in the real estate sector. PropTech solutions include virtual reality tours, blockchain-based property transactions, and smart home automation systems.
Co-living and Co-working Spaces
The rising popularity of co-living and co-working spaces is transforming the way people live and work. These shared spaces provide flexibility, cost-effectiveness, and community-oriented environments that cater to the evolving needs of modern professionals.
Sustainable and Green Buildings
Sustainability has become a significant focus in the real estate industry. Green buildings, energy-efficient designs, and eco-friendly practices not only reduce environmental impact but also provide long-term cost savings and enhance property values.
The global real estate market offers a multitude of investment opportunities for individuals and institutions seeking to diversify their portfolios. Some key investment avenues include:
Residential Properties in Emerging Markets
Investing in residential properties in emerging markets can yield substantial returns due to factors such as population growth, urbanization, and increasing middle-class populations. Careful market analysis and understanding local regulations
Housing Market Forecast 2024 & 2025: Predictions for Next 5 Years
As we move into 2024 and 2025, the housing market is likely to see some significant changes. After a tumultuous couple of years, there is some optimism about the future of the housing market. However, there are also concerns about rising interest rates, inflation, and a potential housing bubble. In this article, we will take a closer look at the Housing Market Forecast 2024 & 2025 and make some predictions about what we can expect over the next five years.
The housing market has been on a wild ride over the past few years. In 2020, the COVID-19 pandemic led to a sudden and severe downturn in the market. However, the housing market has rebounded strongly in 2021, with record-high prices and a surge in demand for homes. With the economy showing signs of recovery and interest rates at historic lows, many experts believe that the housing market will continue to grow in the coming years.
Housing Market Forecast 2024 & 2025: Predictions for Next 5 Years
Increased demand for affordable housing
One of the biggest trends in the housing market over the next five years is likely to be an increased demand for affordable housing. With home prices at all-time highs and many people struggling to afford homes, there is a growing need for more affordable options. This could lead to an increase in the construction of smaller, more affordable homes, as well as a rise in the popularity of alternative housing options like tiny homes and mobile homes.
Continued growth in suburban areas
Another trend that is likely to continue over the next five years is the growth of suburban areas. Many people are looking to move out of crowded cities and into quieter, more spacious areas. This has led to a surge in demand for homes in suburban areas, and this trend is likely to continue in the coming years.
Rising interest rates
One concern for the housing market over the next five years is rising interest rates. While interest rates are currently at historic lows, they are expected to rise in the coming years as the economy recovers. This could lead to a slowdown in the housing market and make it more difficult for some people to afford homes.
Potential housing bubble
Another concern for the housing market is the possibility of a housing bubble. With home prices at record highs and demand outstripping supply, some experts are worried that the market may be overinflated. If this is the case, a correction could be on the horizon, which could lead to a significant downturn in the housing market.
Increased focus on sustainability
As concerns about climate change grow, there is likely to be an increased focus on sustainability in the housing market. This could lead to an increase in the construction of eco-friendly homes and the retrofitting of existing homes to make them more sustainable. Additionally, there may be an increase in the popularity of alternative housing options like tiny homes and shipping container homes, which are often designed with sustainability in mind.
Growing popularity of smart homes
Smart home technology has been growing in popularity in recent years, and this trend is likely to continue over the next five years. With the rise of the Internet of Things (IoT) and the increasing availability of smart home devices, more and more people are expected to embrace this technology in their homes.
What will happen to home prices over the next five years?
It's difficult to predict exactly what will happen to home prices over the next five years. However, many experts believe that prices will continue to rise, although at a slower pace than we have seen in recent years. Rising interest rates and concerns about a housing bubble could lead to a slowdown in the market...
Home Values Will Decrease, Making It More Affordable for Buyers
Home values are decreasing, making it an ideal time for buyers to invest in real estate. This article explores the reasons behind the decline in home values and what it means for buyers.
The real estate market has seen a significant decline in home values over the past few years. This trend is a result of several factors, including the pandemic, economic downturn, and changing demographics. The decline in home values is good news for buyers as it makes homes more affordable, and they can now get more value for their money. In this article, we will explore the reasons behind the decrease in home values and what it means for potential buyers.
Why Are Home Values Decreasing?
Several factors have contributed to the decline in home values. Here are some of the most significant ones:
The economic downturn caused by the pandemic has had a severe impact on the real estate market. The job losses and business closures have resulted in a decrease in demand for homes, which has led to a decline in prices.
Changing demographics have also played a significant role in the decrease in home values. Millennials, who make up a significant portion of the home-buying population, are delaying homeownership due to financial constraints. Additionally, baby boomers, who make up a significant portion of homeowners, are downsizing and selling their homes.
Oversupply of Homes
Another factor contributing to the decrease in home values is the oversupply of homes. Home builders have been constructing more homes than the demand, leading to a surplus of inventory. This has given buyers more options and bargaining power, which has resulted in lower prices.
What Does It Mean for Buyers?
The decrease in home values is excellent news for buyers as it makes homeownership more accessible and affordable. Here are some ways in which it benefits potential buyers:
More Value for Money
Lower home values mean that buyers can get more value for their money. They can purchase a more significant property for the same price or buy a property in a more desirable location that was previously out of reach.
The oversupply of homes has given buyers more options to choose from. They can now take their time and select the home that meets their requirements without feeling rushed.
Buyers now have more bargaining power as there is less competition for homes. They can negotiate a better price or ask for additional concessions such as repairs, closing costs, or upgrades.
The Pros and Cons of Buying During a Market Downturn
While there are several advantages to buying during a market downturn, there are also some disadvantages to consider. Here are some of the pros and cons of buying during a market downturn:
- Lower home prices
- More value for money
- More bargaining power
- More options to choose from
- Potentially lower quality homes
- Potentially higher repair costs
- Limited financing options
- Uncertainty about the future of the market
Q1. How long will the decrease in home values last?
A1. It is challenging to predict the length of the market downturn. Still, experts believe that the decrease in home values may continue for a few more years until the market stabilizes.
Q2. Should I wait for home values to decrease further before buying?
A2. It is challenging to time the market, and waiting for further decreases in home values may not be worth the risk. You should consider your financial situation, long-term goals, and personal preferences before making a decision.
Q3. Will I get a good return on investment if I buy a home now?
A3. The answer to this question depends on several factors, including the current state of the real estate market in your area, the condition and location of the property you're considering, and your long-term plans. In general, if you buy a home in an area with a strong real estate market, and the property is in good condition and a desirable location, you may see a good return on your investment over time. However, it's essential to consider your long-term plans and the costs associated with owning a home before making a decision....
2023 Housing Market Correction: Forecast for the Rest of the Year
If you're in the market to buy or sell a home in 2023, you may be wondering what the forecast is for the housing market. With predictions of a housing market correction on the horizon, it's important to stay informed on the latest trends and predictions.
In this article, we'll dive into the 2023 housing market correction: forecast for the rest of the year. From what's causing the correction to how it will impact buyers and sellers, we've got you covered.
The housing market has been booming for the past few years, with low interest rates and a high demand for homes driving up prices. However, experts are predicting that the market will experience a correction in 2023, which could have significant impacts on the real estate industry.
2023 Housing Market Correction: Forecast for the Rest of the Year
The housing market correction in 2023 is expected to be driven by a combination of factors, including rising interest rates and an oversupply of housing inventory. As interest rates rise, it will become more expensive for buyers to take out mortgages, which could lead to a decrease in demand for homes.
Additionally, there has been a surplus of housing inventory in certain markets, which could lead to a decrease in home values as sellers compete to sell their properties. This oversupply of inventory could be attributed to a combination of factors, including a decrease in immigration and an increase in new home construction.
Overall, the 2023 housing market correction is expected to lead to a decrease in home values and a decrease in demand for homes, which could impact both buyers and sellers.
How the Housing Market Correction Will Impact Buyers and Sellers
For buyers, the 2023 housing market correction could mean lower home prices and less competition. As home values decrease, it may become more affordable for buyers to purchase a home, and there may be fewer bidding wars and multiple offers.
However, buyers may also face higher interest rates, which could make it more expensive to take out a mortgage. This could impact the overall affordability of buying a home, and buyers may need to adjust their budgets accordingly.
For sellers, the 2023 housing market correction could mean lower home values and an oversupply of inventory. This could make it more difficult to sell a home, as sellers may need to compete with other properties on the market. However, sellers may also benefit from lower interest rates, which could make it more attractive for buyers to take out a mortgage.
Overall, the 2023 housing market correction is expected to impact both buyers and sellers, and it's important for both parties to stay informed on the latest trends and predictions.
Top 10 Housing Market Trends for 2023
While the 2023 housing market correction is expected to have a significant impact on the industry, there are other trends and predictions to keep an eye on. Here are the top 10 housing market trends for 2023:
- Interest rates will continue to rise, impacting affordability for buyers.
- The oversupply of housing inventory will continue in certain markets.
- Home values will decrease, making it more affordable for buyers.
- The demand for single-family homes will continue to increase.
- The rental market will remain strong, with high demand and low vacancy rates.
- Technology will play a larger role in the real estate industry, with more online tools and virtual tours.
- Sustainable and energy-efficient homes will become more popular among buyers.
- Cities with lower cost of living and job opportunities will see an increase in population growth.
- Luxury home sales will remain strong, with high demand from wealthy buyers.
- The real estate industry will continue to face challenges with affordability and accessibility.
Emerging Trends in Real Estate 2023: A Comprehensive Guide
Are you curious about what the future holds for the real estate industry? With the rapid evolution of technology and shifting market trends, it can be challenging to stay ahead of the game. In this article, we'll dive into the emerging trends in real estate 2023 that are set to shape the industry. From technological advancements to shifting demographics, we'll cover it all.
Real estate has always been a dynamic and ever-changing industry, and 2023 is no exception. As we move towards the future, we can expect to see significant changes in the way we buy, sell, and manage properties. The real estate industry is set to undergo a major transformation as emerging trends continue to shape its landscape. In this article, we'll take a deep dive into the most prominent emerging trends in real estate 2023.
The Emergence of Smart Cities
One of the most significant emerging trends in real estate 2023 is the rise of smart cities. As technology continues to evolve, so do our cities. Smart cities are designed to improve the quality of life for their citizens by utilizing technology and data to optimize city services and infrastructure. This includes everything from traffic management to public safety, waste management, and energy consumption. Smart cities are set to transform the real estate industry as they create new opportunities for developers, investors, and property managers.
Benefits of Smart Cities
- Improved quality of life for citizens
- Increased sustainability and energy efficiency
- Improved public safety
- Enhanced transportation systems
Increased Adoption of Virtual Reality
Another emerging trend in real estate 2023 is the increasing adoption of virtual reality. Virtual reality technology is transforming the way we buy, sell, and market properties. It allows buyers to take virtual tours of homes and properties, which can save time and money. Additionally, virtual reality can help property managers showcase their properties in a more engaging and interactive way.
Benefits of Virtual Reality
- Saves time and money
- Enhances property marketing
- Allows for remote property viewing
The Growth of Co-Living Spaces
As the world becomes more interconnected, we're seeing a rise in co-living spaces. Co-living spaces are shared living environments where individuals or groups of people live together in a communal setting. This type of housing is becoming increasingly popular among young professionals, students, and digital nomads. Co-living spaces are designed to foster a sense of community and provide affordable housing solutions in urban areas.
Benefits of Co-Living Spaces
- Affordable housing options
- Sense of community
- Shared resources and amenities
The demographics of real estate are changing, and this is set to continue in 2023. The aging baby boomer population is downsizing, while millennials are becoming the largest group of homebuyers. This shift in demographics is creating new opportunities for real estate developers and investors.
Impact of Shifting Demographics
- Increased demand for affordable housing
- Demand for urban, walkable communities
- New opportunities for real estate investors
Sustainability and Green Buildings
As the world becomes more environmentally conscious, the demand for sustainable and green buildings is on the rise. Green buildings are designed to minimize their impact on the environment, reduce energy consumption, and provide a healthier living environment for occupants. In 2023, we can expect to see an increased focus on sustainable real estate development.
Benefits of Green Buildings
- Reduced energy consumption
- Healthier living environments
- Lower operating costs
4 essential money tips when traveling overseas for work
Money-saving tips for work-related travel
Travel is exciting, whether for work or personal reasons. While traveling for work should sound stressful, strangely it usually isn't for many millennials. Add in the perk of having your trip financed by a third party, probably your company or client, and it might get way too exciting. So much so that you start dipping into your own cash reserves.
While you may not be the one spending the money. Traveling overseas for work presents a great opportunity to save up some cash, probably enough to travel again in the future.
The first step as with any frugal spending approach is to sit down with pen and paper and examine your budget; what is essential and what is trivial. What can you live without and what is crucial. Keep these four money tips in mind when next you're traveling for work.
- Consider going for cheaper accommodation. An economical option might be opting for short-term Airbnb units instead of expensive hotels. There are also services, like Homestay, which allows you to stay with a host in your destination for a reduced price. Often, you get to mix with the locals and actually experience what living in that city or country feels like. However, ensure to find out if this wouldn't be in violation of company policy.
- Check out cheaper airlines. You can snag a deal on flights and other essentials with a service like Lowfares that allow you to compare rates on airfares, hotels, and car rentals. Another tip is to travel during off-peak periods.
Generally, weekdays, especially midweek, are a great time to secure cheap rates. FareCompare CEO, Rick Seaney, in an article on USAToday https://eu.usatoday.com/story/travel/columnist/seaney/2018/01/02/best-and-worst-days-fly-2018/995658001/ , puts Jan 9 - March 16 as the cheapest times to fly through Europe. Since prices drop as much as 40% over holiday fares.
- Cut back on restaurants and drinks. Money spent on food per day can easily add up, especially when you're not the one spending. However, it only takes a little discipline to be thrifty and get some cash saved. One tip is to plan out what you'd eat every day and how much you want to spend. Don't get too cut up in the local cuisine, while ignoring your pocket. An advantage of a service like Homestay is that it allows you to spend little on food.
- Teach a language or offer a service. You can try a service like Diverbo, which will cover some of your vacationing costs and in exchange, you help locals with their English. AdventureWork shows listings of jobs in the adventure space. Folks literally pay you to teach skiing and snowboarding etc. You can also babysit or teach a language. https://www.forbes.com/sites/laurabegleybloom/2016/07/27/23-companies-that-will-help-you-travel-the-world-for-free-and-maybe-even-pay-you-to-do-it/#4e5d1881e0fd . So, if you have some free time on your hands, you can consider offering a service or volunteering.
There are also discount services or loyalty rewards on hotels and fares. You can take advantage of these if you frequent the same location multiple times a year.
Traveling overseas for work presents an opportunity to work, have fun and maybe get enough money saved up to finance your next travel....
5 cities with the highest cross border real estate activity in 2018
Asian investors are the largest group snapping up foreign property according to research. But in which cities are they investing? And why?
As more people's attention is being drawn to real estate as an asset class, a larger number of people are seeking out foreign property. 2017 saw a large number of Asian investors enter the market sweeping up properties from the US to Canada straight to France. Recently, contrary to expectations, their attention is being drawn to residential and commercial properties in London, UK.
Propertywire's first quarter of 2018 stats https://www.propertywire.com/news/global-news/londons-commercial-property-market-top-draw-international-buyers/ reveal that overall about 5.6 billion pounds of foreign money was invested in London, with Asian investors contributing about 4.4 billion pounds or 65% of the total investments. The next highest was Hong Kong at 5 billion with Paris following from behind at 1.9 billion pounds.
If you're looking to invest in real estate, one of the major factors you would need to consider is liquidity. Based on liquidity, these are the top performing cities for cross-border real estate investing in 2018. This is indirectly influenced by population growth, employment growth and usually followed by an increase in home values or strong rental yield.
• New York, USA: Brooklyn and Manhattan are two of New York's favorite hot spots for foreign real estate investors. The activity of Chinese, Russian and Middle Eastern real estate investors, paying cash on high-end properties has consistently driven New York City’s real estate price upwards. With a population growth that hasn't slowed down, New York City real estate not only offers liquidity but stability for real estate investors.
• London, UK: Despite Brexit, London leads the way as a favorite for foreign real estate capital. In the aftermath of Brexit, the attention to both London's commercial and residential real estate has been largely driven by a weaker pound and more affordable housing. Foreign real estate activity in London is largely funded by equity funds, institutional investments, and private capital. Units in the mid-range segments have been most popular among buyers. Presently, though, the government is setting tax constraints on foreign real estate investing as the cost of home ownership increases.
• Hong Kong, China: In 2017, Hong Kong was named the "most luxurious" prime housing market for the second year running by Christie's real estate https://www.christiesrealestate.com/eng/sales/hkg . Hong Kong's housing market has shown little cooling with 4.4 billion pounds of foreign money spent by foreign investors in 2018 first quarter. The heated market in Hong Kong, as experts pinpointed, is a major reason for increased residential housing prices all through China.
• Paris, France: The French economy is seeing a boom with the number of foreign investment activity reaching a 10 year high last year. The French economy exceeded expectations with a 2.2% growth, a large number of jobs created and strong real estate activity. Also with fairly stable mortgage rates, many investors are picking up properties in Paris and Bordeaux. Beyond 2018, analysts speculate the South of France will experience a strong housing demand.
• Los Angeles, CA: Los Angeles may soon replace Hong Kong as the no 1 most expensive city for expats. Currently, the average price of a luxury property in Los Angeles is $2.5 million. With population growth, increasing disposable income and a thriving tech sector, Los Angeles real estate offer stability and liquidity for investors. However, housing is in short supply. A situation leading to soaring house prices. With population growth and a great economy, Los Angeles is a great option for single-family investors seeking high rental yield....
5 signs youre cash flow negative on your vacation rental property
Spending money consistently on a cash flow negative rental isn't smart. It might be time to change your strategy.
Vacation rentals are a great way to make extra income from your property investments. Short term rental provider, HomeAway https://www.homeaway.com/info/getting-started/income reports that the run-of-the-mill vacation rental property owner nets $11,000 a year.
But if you consistently have to spend rental profits on roof repairs, vacancies, regular maintenance, bad tenants etc, you probably have a cash flow negative property on your hand. And there are two approaches to dealing with this problem. You can either wait it out and hope things will somehow change or kickstart an exit strategy to move on.
While cash flow doesn't have to be a decisive factor, especially when you have a vacation rental property in an up and coming neighborhood with strong potential appreciation rates. Many times, you might be spending more than you bargained for with your rental. And the faster you discover this, the better.
This article outlines five signs of negative cash flow vacation rentals but before we proceed let's see a simple formula for measuring cash flow on an investment property:
Cash Flow = Total Income (Application fees, Rent, etc.) - Total Expenses (Monthly mortgage (if applicable); General Maintenance, Electricity, HOA, Property Management, vacancies etc.)
As a rule of thumb when buying an investment property, it is wise to set aside an emergency fund to cover at least first six months of expenses. So let's dive right in and see some of the signs to watch for.
1. High vacancy/Low occupancy rate in a location: What's the occupancy rate for your neighborhood? An important sign of a cash flow negative property is high vacancy rate in the neighborhood. According to Turnkey VR https://blog.turnkeyvr.com/much-money-can-make-vacation-rental/ specializing in the management of turnkey vacation rental homes, "Occupancy rates for vacation rentals can be all over the map. For instance, a vacation rental home in a big city might create more demand than a rental property at a seasonal location like the beach". Location is key when buying real estate, especially for investment. Hence it's wise to spend time researching a neighborhood before taking the plunge.
2. High Maintenance property: Are you doling out high monthly fees for property maintenance? Then you might be dealing with a cash flow negative property. A 30-year-old property might offer a great deal but when you have to spend considerable time and money on maintenance and fixes monthly, you have to ask yourself if it's worth it.
3. Declining Rental Property Market: How strong is the rental property market? There is a strong correlation between a thriving property market and low vacancy rates. Many times a declining rental market is a sign of underlying economic issues, most times accompanied by high unemployment rates and slow growth. Sticking around in such a neighborhood would be unwise. Unless you're confident about a significant development in the neighborhood in coming years.
4. High Property Taxes: Did property taxes go up? Taxes can get tricky, especially when you're buying as a foreigner. However, when sudden tax changes are eating up your income, then you have a negative cash flow property.
5. Problem Tenants: Are problem tenants eating up your profits? You have two options, regarding managing your rental property. You can either hire a property management company, which means more expenses but better management. Or you can just ride it solo. While this offers you the chance to take an active role with your property, dealing with problem tenants (tenants who break things, tenants refusing to pay rent or pay promptly, tenants causing disturbance etc.) is a major headache and can eat into your profits.
Hence the importance of having a screening process that's hard to bypass. However, if you deal with problem tenants a lot, it might be time to consider setting an exit strategy in motion.
You can take advantage of short-term rental cash flow with sites like HomeAway and AirBnb. While tenant turnover rates can be high in the short term, short term rentals can be profitable, especially in a popular destination such as a ski resort or beach community....
6 reasons to use a real estate agent when buying a home anywhere
Buying overseas real estate often comes with increased responsibilities. Hence you need an efficient local real estate agent
While you might be a real estate guru in your home country, buying real estate in a foreign country can get messy without a knowledgeable local real estate agents
Here are just three ways things could go wrong when buying overseas property:
Over-the-top valuations: A foreign buyer probably doesn't have the stats on comps and recent sales that would help him make the best decisions on pricing. Locals might see this as a chance to price the property above market value. Without an agent on your side and banking on exchange rate advantages, sellers might feel justified to charge you more.
Taxes and paperwork omissions: In countries like Spain where there could be local rules and taxes regarding foreign home ownership, it's easy to ignore a few details. Not having the necessary licenses and permissions can be very costly.
Lopsided Communication: Sure your developer wants to come to terms quickly, which you find appealing as you don't want to hang around too long. However, you don't want to sign any form or contract without understanding what it entails. It's always important to get expert advice before signing on the dotted line.
You should have two people on your side when buying foreign real estate, a lawyer, to help with legal complications, taxes and paperwork and a real estate agent to guide you through the home buying process. You might want to ignore an agent's services as a way to save on agent charges. But here are six reasons why hiring a real estate agent for foreign property purchases is vital:
1. Full access to the market: Buyers in North America who work with agents have a full access to the Multiple Listing Service (A service that offers access to information regarding market value, comps and properties on the market). While some countries do not have a property listing service, a good agent will likely have a slew of properties and connections with other agents. This ensures he can secure a property that fits your criteria.
2. Detect overpriced properties: Where there is no MLS to set pricing, sellers and their agent often pad the asking price on their properties. Especially when the buyer has no agent on their side. Even in countries with MLS, ignorance can be a justification for an agent to charge you up to 40% above asking price. You can take advantage of an agent's market knowledge in this case. An agent has comps and data coupled with market experience and should be able to tell you instantly when a property is overpriced. However, do not neglect to do your own research about properties that catch your fancy. This will help you keep unethical agents in check.
3. Help with securing mortgage: One of the risky aspects of buying property abroad is getting financing. When considering going for a mortgage, your real estate agent can give you the low-down on mortgages for foreigners. He or she might also be able to connect you with bankers. An agent can also facilitate your loan by helping you with the necessary paperwork. This is one major reason why the services of a real estate agent are invaluable when you're buying a house overseas.
4. Negotiating and drawing up an offer: Negotiating tactics you have mastered in the US might fail to work when negotiating with sellers in Japan. The reason is that there are culture and language differences which can be difficult to fathom. So instead of trying confrontation or hard sell tactics, it is usually best to hire a professional agent who understands your situation and can persuasively represent this to a seller.
5. Help with finding good deals: You're probably trying to scoop up a good deal on a property. However, it's unlikely you'll find great deals by driving around a neighborhood. Agents have connections with other agents and access to a lot of properties. Hence it's much easier to find great deals by working with them.
6. Recommend trusted professionals: A trusted real estate agent would probably have a number of reputable service professionals in his network from inspectors, lawyers, handymen, mortgage lenders etc... This would be highly beneficial since you have little experience in the neighborhood and might be susceptible to pseudo professionals.
Caveat: When choosing agents to work with, work with vetted professionals. Don't just go with the agent down the street as that might turn out costly. This is why we periodically recommend agents in select communities who are vetted and have significant market experience to make your foreign property dream come true....
Whats the impact of Brexit on London real estate?
While some analysts believe Brexit has made the UK housing market porous. Others believe Brexit will pave way for a stronger housing market in coming years
The interaction between real estate and foreign policy is clear cut and this is more than proved by Brexit. As the March 2019 final Brexit negotiations approach, a precursor has been set, which might influence London's real estate market in coming years.
A recent report from international property firm, Knight Frank, puts London as the top favorite destination for global capital. This is due to the fact that London still presents liquidity and stability, factors attractive to investors.
Nick Braybrook, Knight Frank London's head of capital markets says ‘Despite the political turmoil surrounding the UK with Brexit, London is once again the most liquid real estate market in the world. It is more popular as a home for international investment than Paris Central, Manhattan, Munich, and Frankfurt combined,’.https://www.propertywire.com/news/global-news/londons-commercial-property-market-top-draw-international-buyers The influx of foreign investors particularly Asian buyers could be due to a weakened pound sterling, which has led to a slow growth in home prices.
According to an article by FT https://www.ft.com/content/87b1f284-1452-11e7-80f4-13e067d5072c "home prices have seen slow growth since the 2016 Brexit announcement. In May 2018, prices fell by 0.4% in London from an annual rate of 12% in 2016."
The pre-Brexit rise in home prices, which were growing at above 10 percent year over year before the EU referendum has given way to slower price growth. 2018 so far has seen a price growth of only 3% all over the UK. For millennials and London residents, the pre-Brexit rates had kept them on edge with staggering prices. Now the current fair price increases and a residential market that is more or less slow present better odds of landing favorable home deals.
Currently, London's economy is great. There is a low unemployment rate and inflation rates are down. Speculators, however, believe that the thriving economy will lead to higher interest rates soon. This means that first-time homebuyers would need to pay higher down payments on mortgages.
And even though foreign investment has decreased in most sectors, due to the uncertain climate surrounding BREXIT, real estate foreign activity is at its peak. Even the tax hikes introduced on foreign landlords, renting out their houses, hasn't diminished London's foreign real estate activity.
2019 will definitely be an interesting year for the UK's housing market, depending on the outcome of the final negotiations between the EU and the UK. However, an abrupt Brexit will do no one any good. Mark Carney, the governor of the bank of England has warned that a "disorderly" Brexit will lead to interest rate hikes which might greatly affect the property market.
According to FT, Theresa May’s government is actively seeking to avoid such a scenario. The prime minister has softened her position on Brexit in recent months and has agreed to a transition period that would maintain much of the status quo until at least 2021.
What changes do you think might take place before 2021? Leave your thought...