Where should you invest in 2016? Property experts’ predictions

As the new year begins, real estate investors around the world will be looking to new areas for strong returns and capital growth, while holiday home hunters will be scouring sunny destinations for an affordable deal. Where should you buy property in 2016?

We quizzed some of 2015’s top estate agents on TheMoveChannel.com for their thoughts on the last year and their predictions for the future.

The current market

Cayman is experiencing a housing boom, explains Darryl Pickthall, Director of CrownWorld.

“Its number of living units and guest accommodations is increasing dramatically. Moreover, the price per unit/ft2 is increasing too. Much of the residential building in Cayman serves the tourism industry and this sector is thriving.

“Prime building land is scarce so the economies of supply and demand take over.”

“Last year, the company saw land sales in the Cayman Islands – specifically, the Sister Islands, Cayman Brac and Little Cayman – increase by almost 300 per cent, which equates to “more than double that of any comparable period in the past eight years,” adds Pickthall.
 
“I believe some of the most important reasons for being interested in Cayman Brac and Little Cayman is the British Overseas Territory status that both islands have along with the Cayman Islands. And obviously when you are looking at investing somewhere, what you want to know is that you are going to put your money into safe territory. So for a worldwide investor, the Cayman Islands are extremely important and extremely useful as tools to invest in. “
 
“At the start of 2015 Li Ka-shing, Hong Kong’s richest man who has a reputed personal wealth of $33 billion, surprised analysts by moving the bulk of his substantial wealth from  Hong Kong to this little-known Caribbean tax haven,” he explains. “This trend continued throughout the year with many eagle-eyed private individuals and institutional investors viewing Cayman as excellent territory to invest in land, primarily because of its safety as British territory with little currency risk (9th strongest in the world) and also because of its lucrative real estate market and the potential for high capital growth.”
 
What’s in store for the future

CrownWorld say they are “optimistic” going into 2016, noting that Savills Global Research highlights Cayman as one of only two global real estate markets with projected ‘high-growth’ for the next five years.

“Cayman has a growing pipeline of new projects, significant infrastructure investments and a softening in relations between the USA and Cuba are also expected to provide an additional boost to the region,” says Pickthall.

Coming to the market soon…
 
In 2016, CrownWorld will offer investors the opportunity to own ‘care-free’ freehold building plots of land with permission for residential homes.
 
“‘Care-free’ means you don’t have any schedule to build on the land so you can simply buy the land and hold onto it…for as long as you like,” explains Pickthall. “You can build when you are ready. Build at your discretion.

“With prices from only £35,000, interest free payment plans and no holding costs; this is truly care-free.”

The current market

Canada and Brazil have both emerged as firm favourites among investors on TheMoveChannel.com, both appearing in the site’s top 10 most sought-after destinations for 2015. Brazil, which is now preparing for the 2016 Summer Olympic Games, has had interest boosted by the weak value of the currency, while Canada’s appeal to international investors has echoed the controversy surrounding Australia’s popularity, as prices rise in the heated markets of Toronto and Vancouver.

Landcorp International, which advertises property in both countries, had a “fantastic” 2015, with broadening interest from investors around the world.

“We launched various new, online advertising campaigns to reach a wider audience of savvy potential investors with results exceeding expectations. Our campaigns have generated a lot of interest from clients in many countries around the world including the Middle East as well as Europe,” a spokesperson for the company tells TheMoveChannel.com.

“Our investment plot products in 5-star residential resort developments in Nova Scotia, Canada and Parnaíba, Brazil performed equally well and towards the end of the year we launched luxury off-plan property opportunities in both locations that generated a great amount of interest.”

What’s in store for the future

Landcorp International is confident about the coming year, predicting that demand will remain high for both Canada and Brazil.

“We believe that Canada and Brazil will both continue to attract investors in 2016 – Canada for its historical standing as a safe, secure country and Brazil, despite experiencing an economic slump this provides opportunity for foreign buyers to invest due to the strength of foreign currencies against the Brazilian Real,” adds the company.

“Confidence in real estate and property investment markets has been on the rise ever since the global crisis began to wane. Today, thankfully the crisis forms part of our history rather than our present but it is certainly not forgotten. People want investments with tangible assets rather than placing their hard earned money into the hands of unpredictable stocks and shares – and traditionally real estate has remained solid throughout all economic turmoil. 

“This is something that has been a factor in our success as a business since our inception in 2007 and as the property markets take an upward turn in many places around the world, we are confident that this will mean we can continue to offer even more excellent real estate investment opportunities to our clients.”

Coming to the market soon…
 
While Landcorp International has recently launched other investment products in the UK and US student housing sectors, the company has its eye on Brazil and Canada in 2016.

A Showhome Investment Opportunity will allow investors to enter into a joint venture with the developer and share the profits. This is soon to be launched at Forest Lakes Country Club, Nova Scotia.

Fractional Ownership in Pure Resorts Hotels & Residences will give investors the opportunity to purchase a portion of a luxury holiday home in a beachfront resort in the northeast of Brazil. (Investment starts from just £5,000.)

Landcorp International is also expanding from Brazil into neighbouring Argentina. Newly launched are investment plots in a groundbreaking 5-star golf and polo leisure and residential community located in Buenos Aires, with a contractual developer buy-back offering returns of 15 per cent per year.

The current market

The UK has proven hugely attractive among overseas and domestic investors in the last year, thanks to the country’s growing economy, the thriving buy-to-let market and the consistent returns available from the student housing sector.

Interest has switched from the once-booming capital of London to regional markets, explains Ray Withers, CEO of Property Frontiers:

“The UK market has remained strong and steady. Yields are being compressed by capital growth in prices but certain areas of the UK are still good from a yield perspective, particularly in the North and in areas where there is a restriction of ‎supply and/or infrastructure projects are driving demand (e.g. North Oxfordshire, Slough, Reading and Maidenhead).”

Aspen Woolf reports record-breaking demand from investors in 2015, with regional UK cities and student housing again proving most attractive.

“November was one of our most successful in the whole 11 years of being in business,” explains a spokesperson for the company.

“In 2015 we definitely experienced more interest and awareness in the student property sector from both general buyers and investors. Some of our most successful and popular products were Leighton Hall in Preston, Fox Street Village in Liverpool, and Grove House in Manchester.

“We are seeing investors moving away from the inflated prices in London to the more northern cities of the UK where yields generated are much higher.”

What’s in store for the future

“Moving into 2016 we see even more investors turning away from London, especially with the new stamp duty rates in place,” predicts Aspen Woolf. “However it might be worth finding a good property in Stratford as we are positive prices will rise again after it is moved into Zone 2 from its current Zone 3.

“We see Manchester still posing great potential, as well as smaller towns/cities such as Bradford where internal investment is surging and a new Westfield owned shopping mall has opened. It is a good idea to see where further gains can be made from smaller towns/cities as the ripple effect strengthens.”

Coming to the market soon…

The Rocket in Stockton-on-Tees is newly launched on the market by Aspen Woolf.

“With an increasing student population and more regeneration happening in the town, people are looking to move into more modern purpose built accommodation,” says the company.

Just under a 10-minute walk away from Durham University’s Queens Campus, The Rocket offers 218 studio apartments fully furnished to a high specification. Investors will benefit from a 10 per cent net rental yield, guaranteed for 3 years. Additionally, there will be 5 per cent interest paid on all deposited funds.

Property Frontiers will be launching opportunities in a range of regional UK markets.

In Slough, 19 one and two-bed apartments, a 7-minute walk from Slough train station, will offer gross yields of 4.5 to 5 per cent, with prices from £240,000.

In Sheffield, 45 one and two-bed apartments on the outskirts of Sheffield (close to business parks and universities) will offer investors a low price point and high yield.

In Oxford, 10 one and two-bed units within the city ring road will offer gross rental yields of 3.9 to 4.7 per cent, with prices from £190,000.

The current market

Property Frontiers says it is seeing “a lot of interest” in the US market, as people look for “high growth and good yields in a secure market”.

“The USA is seeing some amazing opportunities, but it is more of a long term investment goal,” explains Aspen Woolf. “However, rental yield can be very appealing as well as the capital growth if you are willing to stick it out. The key is to keep to good locations with demand – whether that be beach front, family friendly, heavy tourist footfall, or a holiday destination.”

“We really want to focus on the USA, especially Orlando, Florida,” adds Aspen Woolf. “Why do we want to focus on Orlando? Well, simply put it has all of these things! Keep your eye out on what we might bring forth early in 2016.”

What’s in store for the future

Aspen Woolf will capitalise on the international demand for US real estate by setting up a new office in New York.

“We are really excited about 2016 as we get to branch out further with our offerings,” explains the company. “We will still scour the UK for great investment deals for our clients, but we’re thrilled to be able to better cater for our clients that want to expand their international portfolios. It’ll be another exhilarating year ahead for sure!”

2015 was crowned the year of the British buyer in 2015 by TheMoveChannel.com, as the weak euro fuelled demand for European property in destinations such as Spain, Portugal, France and Italy.

Aspen Woolf highlights Spanish real estate as an ongoing hotspot for bargain hunters:

“Investment looks positive in Spain once again as prices have been steadily increasing during the whole of 2015. For British investors this has really been a year of bargains as the currency has been in their favour with the weaker Euro.

“Murcia and the Costa Del Sol are areas to keep an eye on moving into 2016 still. Tourism was at record highs in Spain in 2015, so it’s a great time to look at properties with holiday rental potential. “

Coming soon to the market

Landcorp International will be launching a new, exclusive luxury property development in Marbella this year.

In Bulgaria, Property Frontiers will be launching a completed resort with a seafront location, a proven track record and 85 per cent occupancy.

In Germany, Property Frontiers will also be launching 127 luxury one and two-bed apartments in Berlin, competitively priced from €254,000.

“The last quarter has seen an exponential growth in interest in International Markets where people are looking beyond the norm in search of more interesting, and often higher, returns,” comments Ray Withers of Property Frontiers.

“We expect this to continue well into 2016 and whilst we have a lot of UK and US product in the pipeline, I see increasing demand for International Property into next year, recently spurred on by the Chancellors changes in tax allowances and stamp duty.”

“Emerging Markets, a name we are synonymous for are also sparking the interest of seasoned investors looking to diversify their portfolios with more exotic returns and we are looking to Africa in particular for more opportunities…”

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