Houses are one of the safest investments that you can make, right? Well, if the recent recession was anything to go by, that statement can no longer be taken literally. Although homes will always be worth something, there’s no guarantee you’ll get back what you paid for a property when you come to cash in on it. Whether you’re an investor or just a homeowner looking to upsize, buying homes is not an exact science – in fact it’s just as risky as any other investment.
With Western economies starting to show signs of thawing following on from the credit crisis that has plagued them for much of the last three years, there has been much speculation that the housing market in Europe and North America will slowly start to recover. Although this prospect is being welcomed by some, others are exercising caution as the recent reports that Britain could be on the verge of hitting a triple dip recession prove that we’re not quite out of the woods yet. As economies recover and house prices start to creep back up, lots of investors are seeing now as the right time to snap up cheap property in the hope of letting it or selling it when the economy is back firing on all cylinders.
It’d be impossible to cover the worldwide property marketing in the space of this short post, but it’s worth looking at a cross section of countries from around the world. Brazil for example, is currently undergoing huge investment both from domestic investors, and investors from around the globe. The fact that Brazil will play host to the FIFA World Cup in 2014 and the Rio Olympics in 2016 has convinced many investors that property there will only increase in value. Of course every bubble has to burst – but with the Olympics so far away, homes in Brazil seem like an attractive investment for the next few years at least. An emerging middle class in Brazil is another reason for a huge surge in demand for houses; buying homes has been the dreams of many past generations in Brazil, but house prices have always proved prohibitive. With outside investment and the emergence of a new middle class, dreams of owning houses are now being realised.
The rapid growth and increase in value of homes in Brazil has to be contrasted with the slump that’s being witnessed in Europe – especially in Spain. Recently the Spanish government put plans in place to permit residency to anyone from any country, providing they buy a property worth £120,000 or more. Many people will see this as a reckless act of desperation – others will see it as a smart move to get people buying homes – hopefully kick starting the Spanish housing market once again.
Whilst there’s plenty of doom and gloom still present here in the West, it is worth remembering that other property markets around the world are not in the doldrums like ours is. Property markets in those emerging economies like Brazil, China and India are all showing promising signs of growth – whilst those property markets in the West, especially in Europe, are showing signs of recovery – but it’s too early to say whether the recovery will happen immediately, or if Europe is going to slip into a new recession.