Best Bets for Property Investment in 2010
The direction overseas property investment destinations are going to take this year is, in many cases, uncertain. But in 2010, one thing is for sure - maximum return from property investment can only be achieved by following the fundamentals.
Investment tips for the year offered in the Emerging Trends in Real Estate 2010 report published by PricewaterhouseCoopers (PWC) is go back to basics. After a good 18 months of troubled waters in many property investment markets - e.g. Spain, Florida and Cyprus - it is time to return to the ground rules of prudent investment.
According to the report, this is the year to take your time, invest with a medium to long-term view, buy land and deal in cash. The report, in its 31st edition, looks at the real estate market in the US, Canada and Latin America. It states that 2010 "will be the worst time for investors to sell properties in the report's 30-year history". However, there is a note of optimism for the buyer who will find "a much-improving environment to buy (with cash)".
In these circumstances, PWC believes investors need to bid their time. "Early is the new wrong," says the report, which cautions against rushing into a property investment even in areas when rock-bottom bargains are available.
The report recommends taking your time before you make an investment decision and then advises that you hold on to the investment for a five to seven-year period. This medium to long-term timescale - Obelisk recommends an investment schedule of five to ten years - allows the property investment to reach its full potential.
Emerging Trends in Real Estate 2010 recommends land investment as one of the best bets for 2010. Land investment is tipped on the grounds that prices may not ever be as low again. In any case, including land in an investment portfolio is always a win-win strategy. As Mark Twain famously said, "Buy land: they're not making it anymore".
PWC also tips hotels and green homes for property investment with most potential this year. The report expects an abundance of hotels at low prices to enter the investment market to the extent that one interviewee in the report claims that "you'll be able to steal good hotels". Residential investment with a ‘green' or ‘eco' focus - e.g. smaller homes within easy reach of amenities and workplaces - is a safe bet for developers.
In the residential property sector, PWC believes that apartments are a good buy. In particular, apartments and holiday homes in top resorts are an interesting target for property investment, especially those in beachfront locations. As the report says, "beachfront condominiums in south Florida always bounce back". The same investment advice can be applied to apartments in prime resorts in Europe such as Marbella, the Algarve and the French Riviera.
Outside the US and Canada, PWC turns its attentions south to Latin America where the report says "investment opportunities center on Brazil". According to the report, Brazil property has the essential ingredients for "real estate value drivers". These are a growing market, an emerging middle class and an abundance of resources. Unlike other Latin America markets with the exception of Chile - real estate here is one to watch - Brazil offers potential and excellent outlook.
The PWC recommendations of timely investment over the medium to long term in land and/or Brazil coincide with the Obelisk investment strategy. We believe that this is the winning formula for property investment that brings both exceptional returns and peace of mind.
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