Global real estate markets, particularly in the West, were hit hard by the financial crisis as banks slashed the amounts they loaned, sending property prices tumbling in many markets.
Two years on and property prices have begun to recover, but still have some way to go to get back to their pre-2008 highs. However, the subdued prices present attractive opportunities for real estate investors.
Hereâ€™s a look at ten cities worth investing in as their real estate market and wider economy bounce back.
After the island nation had 18% GDP growth in Q2 this year and predicted annual growth of over 8%, the government has begun implementing new cooling measures to maintain a stable and sustainable property market, safeguarding future investments. New rules include; changes to stamp duty and LTV deposits. The government has also announced it is to release more land to meet housing demand, further boosting the market.
As Hong Kong competes with Singapore to become the business hub for Asia, it is also changing mortgage rules and putting more land on to the market. The move comes on the back of house prices rising 40% since the start of 2009, and aim to prevent a subsequent bubble as was experienced after prices soared in 1997 to create a stable market going forward.
Rio de Janeiro
A rise in Brazilâ€™s middle class will ignite Rioâ€™s property market in the near future as it will no longer have to rely on foreign investment so heavily. Mortgage rates have also plummeted in 2010, which in turn saw lending soar 77% during the first half of the year compared to 2009. Brazil hopes that with average 60% LTV rates it will prevent the problems experienced in other countries.
A weak British pound is encouraging foreign investment in London. Prices have dropped this year but demand is still meeting supply. As a mature market the British capital will continue to flourish as it contains a solid but limited roster of prime real estate, attracting more international investors.
The Malaysian economy is booming and with immense population growth potential, Kuala Lumpur looks set to thrive in the years to come. Meanwhile, the Foreign Investment Committee is deregulating investment guidelines and the Malaysia My Second Home Programme allows citizens of recognised countries to apply for a social visit visa, which is valid for up to 10 years initially, with renewal options, in a bid to attract more overseas investors.
Turkey was the worldâ€™s third fastest growing economy in the second quarter of 2010. Its construction industry is particularly buoyant and house prices are expected to rise following the financial crisis with foreign investors still looking to buy second/holiday homes. Istanbul, the European Capital of Culture 2010, is receiving the majority of enquiries.
Brisbane has the fastest growing population of all Australian cities, with Brits accounting for 10% of residents lured by the temperate climate and less hectic pace of life offered in Sydney. A recent report by Jones Lang LaSalle also concluded that the population and economy of Queensland will grow at a faster rate in the coming decades than New South Wales and Victoria, providing a further boost to the property market.
Germany the fourth largest economy in the world, is experiencing its largest boost in investor confidence since its reunification, according to new figures from King Sturge Deutschland. In addition to a thriving tourism sector, other industries are thriving in Berlin include; life sciences, communications and automotive ensuring a steady property market. But clearly Berlin is benefiting by being home to the Reichstag dictating policy at the head of Germanyâ€™s powerful economy estimated to grow at 3.5% this year.
The announcement earlier this year that the worldâ€™s tallest residential tower is to be built in Mumbai, portrayed the confidence that the Indian city exudes even during the worst global recession since 1930. Indiaâ€™s GDP growth has averaged almost 8.5% over the last 6 years and as the home of Bollywood and the commercial capital of India, Mumbai always has immense pressure on its housing stock, with no sign of any let up for the foreseeable future for mid priced affordable housing.
Ho Chi Minh City
Overseas investment in Vietnam has been on the rise in recent years following changes to real estate investment laws, which make it easier for foreigners to buy. Local affordability is also increasing, but it is the belief that Vietnam will become the next Thailand in terms of a retirement and holiday home location that is propelling the property market. Vietnamâ€™s economy will grow this year by over 8% with strong export-led growth of 7.3%.