Expert Predicts The Next International Property Hotspots
With the Australian property market softening and research revealing that 1 in 2 Aussies would choose to purchase investment properties overseas, expert Charles Pinckney, Managing Director of City Yield, predicts the next five international property hotspots.
Charles Pinckney says, “With the current climate, Australian investors should be looking abroad to enter the property market and in turn build a profitable portfolio and earn higher returns. However, as investing in overseas properties is becoming more accepted and accessible for everyday Australians, I recommend acting fast and identifying lucrative opportunities”.
To help Australian property investors make the right decision, Charles shares his predictions for the next international property hotspots:
1. Berlin (Germany)
Germany is one of the most lucrative destinations within Europe. The stable political and economic environment, lack of restrictions on foreigner property investors and rapid capital appreciation make it a safe investment.
A growing number of new businesses and start-ups is fueling population growth, with 400,000 new residents expected by 2030. The German capital was also recently voted as the best city in the world for millennials. In turn, both drive housing and rental demand.
The new state-of-the-art Berlin Brandenburg Airport is also scheduled to open in 2020. The €5.3 billion investment will create direct flights to global cities and open Berlin up as a central business destination.
2. Manchester (England)
Manchester is undergoing several projects to support regeneration and economic growth. Manchester Airport is undergoing a dramatic £1 billion-pound transformation to connect it to even more global destinations and include direct routes to major cities. A £1 billion expansion of MediaCityUK (phase 2) has been approved and is set to double the size of a rapidly growing sector in Manchester, which is already considered the 2nd largest creative and digital hub in Europe. Other notable projects include the 50 billion+ High-Speed Rail 2 (HS2) project and £350 million major new Metrolink extension.
Alongside this, Manchester is undervalued compared to London and is one of Europe’s largest student populations with the highest retention rate post-graduation, therefore increasing rental demand. In recent years, dozens of big companies have also made the move to Manchester in search of affordable office spaces, including the BBC, Google, Amazon.
Outside of London, Edinburgh has the strongest economy of any city in the UK. It is a popular choice for investors looking to diversify outside of London due to its performance (up to 6% rental yields still available here). They have a business focused ecosystem, highly skilled workforce and high student population which drives housing demand. Furthermore, house prices have been increasing at a rapid pace over the past 18 months, and are only slowing due to an increase of properties available.
They are currently undergoing dramatic improvements to their public transport network as Waverly Station currently has over 20 million users per year, making it the largest British train station outside London.
4. Orlando (USA)
Orlando has taken considerable time to recover from the property crash, making their property market grossly undervalued. This suggests a healthy potential for capital growth for investors. It is currently the top pick in the US as they are experiencing job growth (7.1% job growth over the past 2 years) and population growth (7.6% population growth over the last 3 years). The city is also set to experiences its highest job growth rate in the 10 years to come. A market with high job growth is a great market for real estate investment, alongside their rental value increasing to 8% in 2016 alone.
5. Tokyo (Japan)
Although Japan is facing an ageing population crisis, the need for property is still strong in the Tokyo area. The 5 central wards of Tokyo recorded increases in population ranging from 16% to 54.7% since October 2010 and their rental yields are more favourable in comparison to other Asian countries, sitting at 3.5-4%.
Japanese banks are also lending real estate at low-interest rates due to the positive yield spread between real estate assets and the cost of capital. Tokyo is also an appealing choice with their strong capital appreciation, a weakening yen and the upcoming 2020 Olympics.
Charles concludes, “Unfortunately investing in the Australian property market is unattainable for the majority of investors. I strongly encourage Australian investors to leverage the power of international property to build their portfolios and achieve success. With multiple services available to predict hotspots and offer specialist advice throughout the journey, I urge Australians not to be afraid of international property investment”.