The worldwide real estate market is made up of many different elements some of which remain prosperous for many years while others fall by the wayside. There are many real estate markets around the world today which are relatively unloved but they could be the lucrative long-term property markets of the future. When looking longer term there are issues to consider such as the fact your funds will potentially be tied up for many years if you are looking to get the greatest benefit. Indeed situations can change in the short to medium term and you may well have to react.
However, there are some very simple elements of a potentially prosperous property market which you can monitor and research relatively easily on the Internet.
Population growth
Even though the worldwide population continues to grow there are regional and country variations in rates of growth. Indeed there will be some areas of the world where the population is reducing if families and individuals are perhaps moving to more prosperous areas. However, one example of an area of the world which is expected to experience significant population growth is India.
We recently published an article about Wall Street investors targeting the Indian real estate market for reasons such as demographics and the eventual spread of wealth. In simple terms, where there is growing demand for property, investors will ultimately fulfil this.
Prosperous economy
The food to feed real estate markets comes from a prosperous economy which creates wealth and demand. While we have the traditional Western economies such as the US and the UK there are others which are showing potential for long-term prosperity. Indeed if we look at South America in its entirety there has been a significant shift over the years and now it is seen as a potentially long-term lucrative economy as opposed to the investment basket-case of years gone by.
In order to increase demand for property there needs to be a prosperous economy to feed employment and attract an ever-growing number of local and overseas investors.
Stable political environment
We only need to look at Greece to see an example of an unstable political environment which has decimated the property market. While much of this was as a consequence of the 2008 worldwide economic downturn there are other fundamental issues behind the scenes including a lack of regulation and control of the financial arena. Indeed there are areas of property market regulation in Greece which have remained untouched for many years despite the fact that the property sector has moved on.
The often knee-jerk reaction to political instability, as we have seen in Greece, can in some circumstances lead to long-term investment opportunities although the situation in Greece at the moment is so uncertain that many are still steering clear.
Conclusion
While there will be investment opportunities in worldwide real estate markets today there will also be markets which are unloved and potentially the prosperous markets of tomorrow. Three basic elements to consider include expected population growth (increased demand for property), long-term economic prosperity and a stable political environment. If you manage to bring these particular elements together in one market then you should move on to the next stage and research local markets in that region. You may find a gem, things may change in the short to medium term but as long as you monitor the situation carefully you can always react accordingly.
Ignoring the short term bumps on the road to a prosperous real estate market can sometimes mean that you still reach the end goal and a potentially significant return on your investment.