5 Predictions on the Property Hotspots for 2016
The property market has been slow to recover from the last recession, however many trades, such as carpet fitters and kitchen fitters are reporting an increase in trade; which may be linked with an increase in house sales.
Studies suggest that the growth experienced this year will continue into next year. There are several reasons as to why this growth is expected to continue:
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Number of Households
A big part of this increase will be fueled by the increase in families and their demand for housing. This is attributed to the lower unemployment rates and improved pay and conditions.
It is estimated that there will be 1.25 million additional families looking for homes this year and the majority of these will be looking for property in the rental market.
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Interest Rates
To ensure the continuing recovery of the global economy banks have been holding interest rates at their lowest rate for many years. These low rates attract buyers as a mortgage becomes more affordable.
Of course the risk is that they will be unable to afford repayments if the rates go up. There are already suggestions that the interest rate will remain low at the end of this year and continue that way for at least the first half of next year.
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Foreign property growth
Unlike many of the housing markets, London has already experienced huge growth and prices are above the pre 2008 recession values. However, it is likely that the price of property in London will remain the same for the coming year.
This is fueled by uncertainty in the global economy and the fact that house prices in London are now seriously over inflated. It is unlikely you will even find a garage for less than two hundred thousand pounds!
Areas outside of London, but within a reasonable commuting distance will benefit. The prices of houses in these areas will increase as London workers look for more affordable homes.
And if London is increasing its prices for homes, what about other markets. Check out Turkish property investment prospects, and you might be surprised with what you’ll find.
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Wages
The property market, alongside many other markets is seriously affected by the expected wage rises of the general population. More money in people’s pockets will make them more inclined to spend money as they will have a higher level of disposable income.
Wage rates are expected to rise in the coming year as the market continues to experience growth. This may not lead to a huge increase in property ownership as concerns over the general election and potential interest rate rises will prevent many people from climbing on or up the ladder.
Of course, this will not prevent some people from investing in rental properties; this is an expanding market with a large number of tenants waiting to move in. This can be a safe way to speculate in the market with minimal risk.
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The Feel Good Factor
The recession now feels firmly in the past and people are feeling more confident about the future, their job security and employment prospects in the future.
This will led to an increase in home ownership as people feel good about themselves and the economy.
Whilst many people will base their decision to change homes or become a first time buyer on the basis of how they feel; this will combine with the ease of obtaining a mortgage and the low interest rates to make home ownership look like a very inviting and attractive option.
The property market is also seen as a solid investment over the long term and it is this that consistently draws people back to property. Not only do house prices tend to rise over the long term, they are also a physical asset which can be seen. This can be very reassuring to any investor who is still a little uncertain of the economy.
Whether you’d like to buy, rent or invest in property – in the US or overseas – there’s one more aspect you need to consider: guidance. Don’t do it on your own if you’re not an experienced realtor because chances are you’ll fail. Ask for advice from professionals and you will have a real chance of making a profit.
Category: Real Estate
