With distrust in banks and financial institutions at an all-time high, it may seem like the economic landscape is a bit of a confusing picture for those wanting to invest their money. There may, however, be an answer: real estate. Colliers Global Investor Outlook 2016 has predicted that while many other areas of the economy will go flat or negative, the real estate market is to remain positive and a sound target for investment.
There are a number of reasons why real estate may be the best place to put your money in 2016. For starters, the property market as a whole is on the rise: in the US alone, funds allocated to real estate investment rose by 11%, and a survey of 600 global investors showed that over half of them would be choosing property as an investment for 2016.
It is also true to say that the globalised economy is producing an increased interest in world cities like New York, London and Paris, resulting in an economic upswing in those places, especially in the US where new business is driving a rush for both office space and living quarters, helping to increase the overall value of property.
Many parts of the globe are also turning into renting cultures, resulting in a massive increase in rental rates. This means that those looking to make buy-to-let investments are likely to profit, helped by the overall stabilisation of property prices in places like the US. In America alone, rental market reports showed that nearly 90% of property managers increased their rent rate in 2015, and that number is predicted to rise again in 2016 by a further 8%.
The final and perhaps most interesting reason to invest in real estate in 2016 is to do with the surge in alternative finance. Real estate crowdfunding platforms such as Bricksave have made investment in property easier and cheaper than ever before, meaning that more and more people are getting into the property game and creating their own long-term portfolios. One report by the University of Cambridge Judge Business School tells us that the alternative finance market in the Americas tripled in size from 2014 to 2015, and it is even predicted that crowdfunding will overtake venture capital in 2016. This means that branches of the economy such as real estate will become open to more people than ever before, helping to establish real estate crowdfunding’s rightful place in the overall economy.
written by Bricksave CEO, Tom de Lucy
May 11, 2016
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