Economic research firm Ernst & Young has released an annual real estate report that indicates the continuing crunch in the global property market. The report however opposes optimism in the market that the state of the global real estate industry is taking an upturn already. The outlook can be bearish but is certainly realistic and practical.
Global real estate may still be not on the rebound, as many hopefuls perceive. It is expected that for quite some time, selling property assets would still be not as rosy and as lucrative as it used to be. Thus, for investors, buying and investing in real estate assets may still not be sound these days. The market still looks uncooperative and unfavorable as far as real estate is concerned.
In the United States alone, the real estate market is expected to further decline. With the looming economic recession and potential job losses, the US real estate industry is likely to continue performing weakly. The US mortgage industry is still sluggish as more lenders and investors continue to temporarily stay out. These are the times when exposure and investments to the mortgage industry are considered more of liabilities as assets.
The bad news about the state of the real estate industry not just in the United States but also around the world is that the worst is not over, at least for the time being. However, whenever there are downfalls, there surely are areas of opportunities. It is because it is a common knowledge that in times of crisis, there always are windows of opportunities opening up.
Here are some important factors and projections that are likely to offset the continuing setbacks provided by the weak real estate industry.
Capital infusions are expected to continue to flow from all around the world. The United States real estate market is particularly attractive to investors who are aiming to buy assets at very reasonable and affordable prices. By that, it is believed that the downturn in the property industry is seen as an opportunity for investors who aim to buy at low prices, and then sell at much higher prices in the future. However, it is not certain how long investors should keep their assets before they can roll out at good and profitable prices.
Sovereign funds that are investing in representation of governments are expected to continue infusing investments into real estate industries all around the world. The trend is clear that such financial institutions are more eyeing luxury and important properties especially in urban centers and commercial hot spots like San Francisco and New York. As mentioned, such investments are aimed at underpinning the current low prices for projected higher revenues and earnings in the future, when the real estate assets can finally be sold.
Patience and good investment decision-making is expected to be further developed within investors. As such, the real estate investors are said to be evolving, for the better. Times of crisis help make investors tougher and more resilient.