Forbes magazine recently published a list of the top 10 places in the world for real estate investment. The list was culled based on a survey done by The Association of Foreign Investors in Real Estate (AFIRE), whose 200 members own about $700 billion worth of property around the globe.
If you’re a newbie investor, it’s never too early to set your sights on the big prize. If you rub elbows with the likes of Donald Trump, you’ve probably already started your due diligence.
1. New York
While New York is still going strong, parts of the property market will experience a slowdown, according to a New York Times article. While the housing market will remain afloat in 2008, the effects of the credit crisis will be felt in 2009. The city has one of the most expensive prices for apartment buyers, with property in prime locations costing about $15,933 per square meter.
2. London, United Kingdom
Housing prices in London fell by 2.5 percent just this June, according to the Evening Standard (U.K.). House prices are expected to fall by as much as 25 percent by 2010, according to a report by Oxford Economics. However, the same report forecasted a 15 percent rise in prices by 2013.
3. Washington, D.C., U.S.
Prices in Washington D.C. fell an average of 15 percent by May 2008 compared to the same period in 2007, according to Standard & Poor’s/Case-Shiller Price Index. While the housing market has been impacted by oversupply and bad loans, the commercial sector doing well thanks to government generated business in the capital, according to Forbes magazine.
4. Paris, France
In the first six months of 2008, prices fell 2.6 percent but rose by 3 percent in June, erasing the decline seen in the first two quarters of the year, according to an article at French-Property.com.
The occupancy rate of the commercial market in Paris is at its highest, according to Forbes magazine. The sector will see rising rental prices for as long as demand continues to outstrip supply in the city, as is now the case.
5. Shanghai, China
Both the housing and the residential sectors in Shanghai continued to do well, according to a report by Jones Lang LaSalle. Retail properties located in prime areas have a zero vacancy rates while a robust demand remains. Office rents for the city are up by 2.4 percent over the second quarter. Residential rental market remains strong.
Prime location apartments cost about $3,318 per square meter, making Shanghai the least expensive city for apartment buyers on Forbes magazine’s list of the 10 best places to invest.
6. Tokyo, Japan
There are fears that rising vacancy rates may result in lower rental yields followed by a price fall in the property sector. However, negative property trends in the Tokyo market are expected to be only in the short term. Japan still has plenty of investors waiting to buy real estate on the down, likely offsetting any dips in the market. Prime location apartments are sold for about $11,870 per square meter.
With its citizens’ rising salaries and the growing tourism industry, retail space is still a rising market in Singapore. Prime location apartments cost about $11,800 per square meter.
8. Munich, Germany
Germany’s property market, especially in the cities, is expected to only be affected mildly by the global credit crunch. The Munich market has grown above the national average over the past couple of years and is expected to remain stable with real estate in German cities predicted to grow 3 percent to 4 percent over the coming years. Prime location apartments cost about $3,613 per square meter.
9. Sydney, Australia
Prices are rising in the leasing market in Sydney, according to the Sydney Morning Herald. Rents rose by 8 percent in the second quarter of 2008. However, housing prices will continue facing tough market conditions over the next year as the credit crunch persists. The rental market is also expected to sag as demand in the middle and top markets begin to decline over the rest of the year. Prime location apartments are sold for about $7,085 per square meter, according to Global Property Guide.
10. Hong Kong, China
Apartment transactions in Hong Kong are expected to fall because of inflation and a weak stock market. Prime location apartments cost about $12,599 per square meter.
*Prime location apartment costs data taken from Global Property Guide.