Towards the end of 2015, IMF chief, Christine Lagarde, warned that the year 2016 would probably experience an outstanding global growth. Despite this, the financial market may likely experience some forms of volatility due to fluctuating oil prices and other obvious economic tensions and uncertainties. Saudi oil minister, Ali al-Namin, also said that the country which is a major producer of oil had no plans on scaling back production despite the sliding price of Brent crude (oil). All these coupled with the slow global economy (which is mainly due to CHINA’s slowing economy) are forcing down the international price of Brent crude (oil).
The financial markets in the first quarter of 2016 is very volatile because there is a lot of uncertainty with major points such as the Chinese economic woes, higher interest rates in the USA, plummeting oil prices, and of course, the increasing tensions in the middle east. With all these happening, one may ask where the safe haven is for one to put his/her money and get good returns. For a lot of financial analysts, 2016 is the year to invest in real estate. This is due to people’s sentiments with regards to investing in this market, which is likely to remain the same, if not better.
In the first 9 months of 2015, a staggering $625 billion was made on direct property investment all over the world, which is even expected to be even more this year. In a recent survey of over 600 investors, 52% said they would increase their real estate investment this year. Just a little over 10% of that number said they would decrease. With more than half the respondents, who own multi-asset real estate portfolios saying they would add to their holdings, real estate investment all over the world is expected to grow in demand even in the New Year. Major cities such as London, New York, San Francisco and Tokyo are the main targets for these investors.
America, the United States, seems to be a major hot cake with 94% saying they would increase their investment in the region this year. Within the United States, there are three top cities where investors would be looking to put their money, they are; Los Angeles, New York City and San Francisco. Warehousing, malls and office spaces are the top three logistics leading to increased investment in these areas this season.
For other places in Europe such as U.K, 63% agreed to add to their property portfolios there. Out of the lot, London is the major site with 43% while Paris follows far off with 19% and Frankfurt. Again, shopping malls and offices top the list for investment in Europe. Japan, Australia and Hong Kong command the share of investment in Asia with a little over one third of the respondents saying they would allocate more funds to real estate. The major cities for investors are Tokyo, Melbourne, Beijing, Shanghai and Sydney.
Meanwhile, retail investors who would like to invest, but lack funds rely on exchange traded funds as the way out. It is obvious here that New York City is attracting more foreign investors than other US cities.
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