Real Estate Hunch – Why It Is Big Business?
Let me start with the fact that when examining the different asset classes, real estate is generally far less volatile than shares and real estate tends to be the haven that investors flock to when other asset classes are suffering. Actually, it is true to say that investment properties can have many results in terms of building long-term wealth, but we must never forget that this wealth is not assured!
It is common knowledge that following the global real estate boom of the late 1980’s many investors learnt this hard lesson when they found their properties were worth far less than they had actually paid for them and the bottom seemingly fell out of the over-inflated market. As a matter of fact, the bottom did not truly fall out of the market after all as all real estate retained value; the real estate market simply experienced an overdue rebalance and has gone on to build from this point of stability. Anyway, since the booming 80’s ‘sensible’ investments in real estate have still offered important attractions and advantages, and it is back to real estate that investors have turned in recent years.
Beyond any doubt, with real estate prices in some countries soaring, and first time users struggling to get onto the first rung of the real estate ladder, many people are looking further a field for investment property opportunities. If we are making a closer investigation, a recent report in the UK highlighted a 130% rise in the value of farmland since the 1990’s for example – fuelled entirely by a new breed of non-farming buyers. In fact, with bricks and mortar real estate prices in the UK now so exorbitant, these non-farming buyers are looking for alternatives for their money.
It’s well known that they may be unable to afford real-estate investments and unwilling to risk their cash on the ever volatile stock market and so they are buying up fields and pastures to get in on the real estate investment game! To the best of our knowledge, others interested in property investment have been examining the real estate markets around the globe for value for money, return on investment, potential for growth and development, rental market opportunities and basic stability. To make things clearer, with current investigation showing that up to one in eight Britons intend to purchase an overseas real estate within the next five years you can see that overseas real estate investment is very big business.
According to some data, relatively newly discovered property markets are opening up or expanding in countries such as North Cyprus, South Africa and Bulgaria for example – where potential buyers are afforded incredible worth for money when it comes to real estate. We have every reason to believe that the real estate market in countries such as these has been artificially restricted through the threat of war or political instability, and now with their recent history showing that they are stable countries with strong economies and populated and governed by those with a first world successful, property investors are finding markets rich in diversity and potential.
As you may know, Dubai is another country offering interesting real estate investment options. It is interesting to know that since May 2002 when the crown prince of Dubai, Sheikh Mohammed bin Rashid Al Maktoom issued a decree allowing foreigners the right to buy freehold real estate there, the real estate market has exploded. It has long been known that properties available in Dubai range from modest one bedroom flats to freehold exclusive islands. And, in fact, property there still offers very good value for money – moreover the tax and business advantages in Dubai are very appealing and so real estate investment in Dubai is enjoying a buoyant upward trend.
And, it’s not a secret that then there are the ‘old’ favourites – France, Florida and Spain for example are all countries with a long history of investment real estate appeal – especially for Britons and Northern European residents looking to march off the weather and invest in a home in the sun. It does not matter whether you are looking to secure a home for holidays, your retirement or you are looking for a long term investment opportunity these countries still offer the investor potential for real estate growth.
Actually, when it comes to considering real estate as an investment vehicle it is a tried and tested method used for attempting to secure long term gains – but as with any investment, gains, returns and security of investment are not guaranteed. Beware: whether real estate investment is right for you and matches your circumstances and attitude to risk is something that you need to consider.
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