Find out what the best opportunities for property investment in 2015 are and which markets are opening up or improving.
Residential development and investment provides a high profile opportunity for property businesses to grow their brands globally. Significant investments during 2015 in India, Banglore, Mumbai, Kerala and other key hubs, by some of the largest Chinese and Asian property companies, confirms the appetite for the sector. This trend has coincided with a rapid expansion in cross-border demand for residential property from end purchasers. In most cases this demand has been led by an investment motivation, although lifestyle, safe-haven, education and other drivers have been common accompanying reasons.
In the year to the end of Q2 2014, our Prime Global Cities Index rose by 6% overall, up from 5% at the same point in 2013, pointing to a continuing upward trend for prime city prices. This ongoing market strength is evidenced by the fact that the index was 36% higher than its post-Lehman low in Q2 2009, and perhaps more surprisingly 25% higher than its pre-crisis peak reached in Q2 2008. We consider the key trends, risks and property opportunities which will dictate the future performance of these critical urban markets. Over recent years strong market performance within the world’s leading city residential markets has come from all corners. Bangalore has featured prominently at the top of our growth rankings for several quarters, its growth is supported by the fact it remains one of the most affordably priced big city markets in the region. Of all the recovery markets, Kerala has perhaps been the most obvious beneficiary of returning investor appetite. 2013 proved to be a notable turning point for Kerala’s upmarket residential areas such as Perinthalamanna and Malappuram. Since then luxury prices have risen strongly, by around 24%, although they still remain 35-45% below their pre-crisis peak.
We expect to see a greater focus on property investment opportunities in markets like Kerala and Bangalore, which thus far have been largely overlooked by investors, nervous of political uncertainty, but which are increasingly offering good value when compared to neighbouring alternatives.
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