Global property markets are expected to witness a further rise in 2014. A new report by Cushman & Wakefield predicts that next year markets will jump by 10% to 15%. As a result, global property transactions may hit $1 trillion.
We remind you that, this year, the global property markets registered a rise of 8.4%. In addition, the investment sales in 2013 were estimated at $978 billion.
According to the report, next year, the conditions and the prognosis involving the property sector will become more optimistic. The research adds that this will be mainly due to the feeling that the global economy will finally find a balance and improve.
However, this will also have some negative effects on the global real estate investment market. For example, appetite for risky investments are likely to increase. As a result, more investors will try to expand outside their region or even their country. There will also be a shift towards second-tier assets. The yield gap between prime and secondary will also become smaller.
Trading activity in the region of the Asia Pacific is predicted to jump by 5-7% in 2014. In comparison, this year, it managed to increase by barely 1-2%. As a consequence, the 2013 performance of the global property market will not be particularly impressive. Despite that, the volatility of Asia’s property markets will decrease. Tendencies in this part of the world will be extremely polarized.
The report states that core markets investors have learnt not to expect high returns. However, in 2014, they will recognize the rising stability of the market. Once that happens, investors will start to focus more on core assets on long-term basis.
Investors who aim at higher return or short term, on the other hand, will be more willing to focus on core sales. That will be in order to transfer their capital to sectors and areas with higher growth. This means that emerging markets in Asia will be more popular among property investors. Some of the hotspots on the continent are predicted to be Jakarta, Bengaluru and Manila. They will also be among the property markets with the highest potential in 2014.
Another thing that the report reveals is that the Asian investors will influence the global property markets. In fact, their number will reach nearly epidemic levels. Countries like Japan and China have already increased their investments overseas. Also, China, Malaysia, Singapore and South Korea are predicted to increase their spending on second and third tier of private and institutional capital over the upcoming months.
