Where is the trend leading us in 2010 and beyond. To work out where the cycle is and where property prices will lead us it is useful to look back at previous trends.
Over the last 100 years we have seen movements of property values rise and fall around the world and while it has been hard to be certain about the actual outcome the pattern nevertheless has some tell tail signs.
During the boom years in Japan where it became and still is a leading economic power real estate values rose in line with the affluence of the country. Tokyo saw some of the most expensive real estate values in the world and the concept of multi generation mortgages became part of the aspiration of purchasing a property outright -- not because the buyers wanted it but because they had no choice.
In Hong Kong at the turn of the point where it was handed back territory wise to China real estate values rocketed as Hong Kong was to remain in an operational sense an outlet for China to trade from. Hong Kong is an very business-oriented location and is very set on remaining a financial centre and with that real estate remains of high value but at a lower level than at its peak. Hong Kong saw its cycle rise to unafordable level only to see them drop due to external influences of emerging markets coming online eleswhere -- Singapore, the UAE and Brazil have all had an influence in the changes seen within Hong Kong's real estate sector.
Cycles, Bubbles, Peaks and Troughs are all part of the real estate market and whether as an investor or lifestyle seeker it is always wise to keep informed as to the current state of the markets both locally and internationally.
Can we predict the next real estate trend?
It all comes down to opinions and information gathering based on general world events such as people migrations, specific country economic conditions, business activity levels, monetary flow, stock markets indexes and world events.
But does this really help? Yes and no is the true answer as in a herd mentality people will buy simply because someone else did and it turned out to be OK -- in the end. It can also be a time of life decision made by large number of people in one age group or class that affects the overall value or direction of prices.
During the 70's and 90's in the United Kingdom the concept of owning a home became more accessible to the working class sector who previously on the whole rented state owned property for a weekly fee. The numbers of home owners rose significantly and the financial industries catered for this new previously untuched market place. This trend has repeated itself from country to country and each time we have seen rises and falls in property values according to external factors.
The Boomer age was born with a generation being able to take assett value out of their primary or first home to place it as deposits on 2nd and third homes mainly for lifestyle improvments reasons. Financial markets saw this trend emerge and as such the concept of inveting in these emerging sectors became a very large slice of the pie.
While even now we see depressed real estate markets property is still being purchased for lifestyle reasons as the 'empty nestor' generations still want that home in the sun to relax to later in life.
One primary example is Florida in the USA which still has active buyers even though property in some locations has fallen to very low levels. Quality property is still being purchased even if not as investments because the region has the amenities that the baby boomer generations from Europe, the US and Canada are still seeking.
Over the next few months we will explore in more detail property trends. |
