The year 2017 witnessed a surge in overseas investment in real estate. In addition to the traditionally popular real estate markets such as Hong Kong, the United States, Canada, and Australia, which remain strong, emerging countries in Europe, represented by Portugal and Greece, have also rapidly risen and gained increasing popularity among Chinese investors.
What will the real estate market in major overseas purchasing countries and regions look like in 2018?
The U.S. market remains strong, with rising housing prices
Entering 2018, the U.S. real estate market is expected to experience its strongest period in nearly a decade. The increase in employment rates will make the rental market hot, further driving up housing prices.
Zillow predicts that national housing prices in the U.S. will rise by 6% in 2018. This means that the increase in U.S. housing prices will exceed the wage growth by more than double. Additionally, with rising interest rates, the purchasing power for real estate is expected to decline in 2018.
The UK shows steady growth, with "Brexit" bringing upward momentum
Although Brexit has added many uncertainties for investors in the UK real estate market, the stable development of the UK economy, especially its position as a global safe haven and value preservation center, has remained unshaken, allowing the UK real estate market to develop well last year.
According to Halifax data, the total value of UK real estate has increased by nearly £2 trillion over the past decade. Davis predicts that London will experience its first instance since 2011 where rental growth exceeds housing price growth, with rents expected to rise by 17% over the next five years.
Barclays, based on 2017 data, predicts that UK house prices will rise by 6.1% over the next five years. By 2021, the average house price in the UK is expected to reach £300,000.
It is important to note that the latest regulations in the UK government's autumn budget in 2017 exempt first-time homebuyers from stamp duty for properties under £300,000!
This will lead to a large influx of first-time homebuyers into the market, resulting in a shortage of property resources, creating a situation where properties are available but not sold, leading to further increases in prices for homes in this price range.
Demand from mainland buyers in Hong Kong remains strong, with optimism from major institutions
Due to a large number of mainland buyers and local financial consortiums entering the market, Hong Kong's real estate market had a banner year last year, with transaction records continuously reaching new highs and housing prices frequently breaking records. The Centa-City Leading Index (CCL) rose by over 13% in 2017, marking the largest increase in nearly five years.
For the development of the Hong Kong real estate market in 2018, major institutions are optimistic. First Pacific Davis predicts that general residential property prices will see a moderate increase of 5% to 10% in 2018. Jones Lang LaSalle also stated that despite the impact of interest rate hikes, demand for small to medium-sized residential properties will remain strong, with residential property prices expected to rise by about 10% in 2018.
Portugal and Greece have clear policy advantages, with strong upward momentum
Due to the highly attractive immigration policies for property purchases in Portugal and Greece, an increasing number of overseas investors prefer real estate in these two countries.
The relatively low costs associated with purchasing property and the easier path to obtaining permanent residency compared to traditional immigration countries make these nations particularly appealing to many potential immigrants. Additionally, advanced medical facilities and high-quality Western education further enhance the attractiveness of property investment in Portugal and Greece.
Experts predict that the real estate markets in Portugal and Greece will continue to thrive in the coming years, especially with rental yields expected to remain attractive, projected at around 5%.
The growth of the immigrant population in Australia is driving a slight increase in housing prices
In recent years, the influx of foreign employees and the increasing number of immigrants have not only driven up local housing prices but also fueled a booming rental market.
The QBE "Australian Housing Outlook 2017-20" report indicates that the median price of independent houses in Australia will continue to rise over the next three years, with the Melbourne area expected to see an increase of over 10%.
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