Nick Churton of Mayfair International Realty comments on the international real estate market and offers some encouraging words for sellers in North America.
Welcome to 2016 and a new era in international real estate. It promises to be an eventful-packed year.
Despite political union, Europe remains a stark continent of huge contrast – north and south, left and right, east and west. The relative wealth and power of the northern nations seem at odds with the hardship and austerity currently experienced by those in the south. It seems you can have a warm climate or a warm economy but not both. The impact of middle-eastern turmoil, the resulting migration of millions of people and terrorist atrocities in cities such as Paris are affecting real estate buying decisions across mainland Europe in a way not seen since the 2008 credit crisis. In the UK - which is readying itself for a referendum later this year to determine if it stays in or heads out of the European Union forever - has also imposed higher real estate taxation making investment less attractive to buyers from home and abroad and adding to the malaise. Nevertheless house prices in the UK have risen ten per cent over 2015, mainly due to low inventory.
With the economic slowdown particularly in China and South America, and the slump in worldwide oil prices the appetite for prime city-centre property has been blunted in many places globally for the time being at least.
There is plenty of worrying news to concern international real estate buyers. But in any financial cycle there is usually at least one world region which offers investors a safe and attractive place to live and to enjoy the benefits of a secure culture. Right now that is the US. With the economy there steadily improving and pockets of exciting opportunity across the nation, not to mention many areas of warmth in climate and welcome, the US offers real estate buyers the safe haven they crave. No market likes uncertainty and the upcoming general election in the US later this year provides plenty of scope for some of that. This will naturally intrigue overseas observers who no doubt will have concerns. But despite this North America still provides many exciting opportunities. From a lengthening list of key city investment locations headed by New York to the foremost leisure and vacation areas the US should once again be the country of real estate opportunity in 2016.