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Where to invest in 2016

By Surrenden Invest | December 15, 2015

Those keen to invest within the domestic market are spoilt for choice when it comes to sourcing opportunities here in the United Kingdom.

A consistent destination for forward-thinking investors, the property market in the capital remains one of the most attractive thanks to the city’s chronic undersupply of residential housing, despite developers’ best efforts to keep up with demand and overseas investment driving the transformation of areas such as the Royal Docks. The average price of a home in London is set to reach the £1 million mark by 2020.

Manchester’s revived appeal has gained a lot of traction in recent years, particularly since the launch of the Northern Powerhouse initiative.

Manchester is undergoing a great deal of expansion and redevelopment. The local authorities are keen to not only attract professional talent to the area, but retain it – particularly when it comes to ensuring that graduates from the region’s top colleges and universities are able to find employment locally. By establishing cutting-edge epicentres for commercial activity through developments such as X1 Media City, and improving local connectivity for a more fluid infrastructure, Manchester has become the UK’s fastest-growing city and experienced record demand for housing as a result. Average rental yields have reached 7.98%, and this figure is forecasted to grow further.

Demand for property is ever-increasing in the German capital, particularly in the city’s Mitte, where prices were up by 24.12% in 2014. Now firmly established as one of Europe’s most thriving economies, Berlin is continuing to welcome thousands upon thousands of new residents every year, which has seen developers clamouring to complete the required number of new apartments to meet supply objectives.

The United States offers exceptional opportunities for investors, but which cities are attracting the most interest?

Prices have continued to rise for the last two years in this bold, lake-side city, and experts predict the market has been on track for more growth in 2015. Famed for its good value investments, property prices remain at 20% below peak yet rental rates continue to increase. Average rental yields in Chicago currently sit at approximately 7.9%.

Sitting close to Cuba at Florida’s south-western tip, Miami is renowned for its strong condo market; secondary sales increased by nearly 7% in the first eight months of this year. Prices here have remained substantially below peak, maintaining a striking proposition for international investors, who are now dominating the local market – remarkably, just 15% of property in Miami is owned by domestic buyers.

Other locations of note
Operating within a stable, secure market that is backed by extensive quantitative easing policies, Tokyo offers low interest rates of 0-0.01%. Thanks to The Bank of Japan’s current stance, this is unlikely to change in the near future, resulting in economical deals for both domestic buyers and investors.

The city of Melbourne in Victoria, Australia is predicted by HSBC to grow by up to 8% next year. Apartment prices grew by 5.1% in the 12 months to September 2015, and Melbourne’s attractiveness has also been somewhat boosted in recent times by the fact that the city has been voted top of the Economist Intelligence Unit’s Global Liveability Index for the last five years running.

Brisbane, set out further to the West in Queensland, is enjoying healthy growth thanks to on-going regeneration and investment in its economy, which is now worth an estimated 146 billion Australian dollars. House prices in the city have increased by 5% per annum in the last three consecutive years.

Keen to explore new markets? Proceed with caution
Risk-friendly investors may be content to boycott the ‘safer’ markets listed above in favour of potentially emerging markets. The industry is keeping a close watch on thriving cities across the pond, such as Los Angeles and New York, which are experiencing consistent growth; come a little closer to home and you may be swayed by the opportunities now available in Madrid and Dublin.

However, those keen to test these emerging markets should proceed with caution. Speak to Surrenden Invest today for advice on residential property investment opportunities from our experienced consultants.

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