The year 2020 approaches fast and with it many potential real estate investment opportunities. Since there are many places in the world where the potential for growth is real, we’ve assembled a shortlist of destinations for investors looking for new estate ventures. Together we’ll look at them as well as at what real estate investors believe about the real estate potential in certain areas.
A big country with plenty of potential, especially when it comes to coastal areas like Fortaleza. Because it’s a top destination for both Brazilian and foreign tourists, rentals targeting the local holiday market had been earning an average 8% net yield. Brazil carries the advantage of having weak currency (approximately 3.8 reals for 1 US dollars) and in combination with good yields, this country might be an appropriate destination for real estate investors.
Even though Thailand is well-known primarily for agriculture, its economy is perceived as strong and the tourism industry continues to expand along with it. Bangkok was the most visited city in the world in 2018 when it received more visitors than popular cities like Paris or London. There is one downside, though, because of restrictions placed on how foreigners can buy property.
Because of that, foreigners had been focusing on the condo market, given that there are allowed to own not more than 49% of the total area of the condo building. This type of construction is easy and cheap to manage as a rental than an individual property.
We suspect the most developed African nation will continue to trend higher in 2020. Although the economic activity had been sluggish, interest rates had decreased, which supports first-time homebuyers to take a mortgage.
“South Africa will continue to be a major destination for both local and foreign real estate investors because of its strong regulation and potential for growth. With developed tourism and increased demand for small and medium houses, investors will be able to find plenty of new opportunities in 2020”,thinks Ofir Eyal Bar, a popular real estate investor.
Since we’re talking about the most important country in Africa, risk-averse investors will continue to search for opportunities and ignore the northern region, where countries are less developed, real estate liquidity is low and volatility very high.
The residential real estate market in Portugal could be in the center of attention during 2020 for one particular reason: this is one of the few European countries where non-residents are allowed to get a mortgage. Because of that, property markets in the country had been moving up since 2015, placing Portugal among the best-performing markets in Europe.
According to Kathleen Peddicord, “some neighborhoods in Lisbon, for example, are now priced beyond what I believe makes sense for property investment. Other areas of this city, however, continue to offer good value and opportunity, especially if you’re up for a renovation project.”
She also recommends investors should focus on the lesser-visited areas along the Algarve coast and the region around Porto for the year ahead.
The uncertainty around Brexit had been favoring France, especially Paris since the city overcome London as one of the most popular destinations for big real estate investors. In addition, “we’re talking about another country where foreigners are eligible for in-country financing and interest rates for mortgages are less than 2% per year”, as Ofir Bar highlights, given the ultra-low monetary policy conducted by the European Central Bank (ECB).
Some could argue that economic activity is weak and the prospects for growth are limited, but another factor that could weigh heavily is the exchange rate between the Euro and the US dollar. The weakness of the Euro creates great opportunities for investors in the United States and that could act as a tailwind for the real estate sector in 2020.
The conclusion is that real estate investors around the world will be able to find plenty of new opportunities around the world. You should keep into account that the countries we’ve talked about are only a few of the options. Also, each investor should conduct his own research in order to assess all the potential factors that might have an influence on the real estate sector.