Fiducia Partners Insights - Up-and-Coming Locations to Invest in Real Estate

Up-and-Coming Locations To Invest In Real Estate

August 23rd, 2018 Posted by Investment 0 thoughts on “Up-and-Coming Locations To Invest In Real Estate”

When I’m considering a new real estate investment I try to identify up-and-coming locations so I invest ahead of the market. Cities like London and New York, while they have always been top choices for investors, are now mature markets. Here are four locations that have caught my interest in recent months.

 

Berlin, Germany

Berlin is riding high in terms of economic growth, driven by an explosion in high-grade new real estate units that are priced relatively low. According to property consultant Knight Frank price growth in Berlin registered at 20.5% in 2017 making it the city with the fastest rising property prices. While some are concerned there’s a property bubble waiting to burst the projected growth of the city is hard to ignore. Berlin’s population has grown 50,000 a year over the past five years to 3.5 million, projected to reach 4 million by 2035. While Germany’s central bank, the Bundesbank, thinks property in Berlin could be as much as 35% overpriced, for buyers from London the city remains cheap with flats on the market for a third of the price of equivalent-sized properties in London. More and more real estate investors are turning their eye toward this city’s market, including me.

 

Denver, Colorado

Cranes litter the skyline of Denver right now and with a steady rise in real estate prices for the last five years it looks like now is a good time to invest.

 

Denver Median Sales Price

 

Source: Trulia.com

Interest from Amazon as it hunts for a site for its HQ2 has led to 40 other companies including several Fortune 500 companies to show an interest in opening or expanding operations in Denver. If Amazon chooses Denver for its HQ2 site it will create up to 50,000 jobs and if the 40 other companies that have shown an interest follow through this could create a further 12,000. This potential, coupled with a new light rail, the billion dollar National Western Centre development and planned 90-story skyscraper indicates Denver is ambitious to grow and become a serious centre for business.

 

Istanbul, Turkey

Istanbul is in the midst of a major real estate boom. With its growing population, government incentives and Turkey’s 2023 vision aiming to increase the capita per household to that of European countries the buyers’ market is likely to keep on growing. The construction of a third city airport due for completion in 2028 along with other projects like the Istanbul International Financial Centre are predicted to raise property values even more and are proving a big lure for investors.

It is worth noting however that while the recent 20% collapse in the Turkish lira has made Istanbul more attractive to foreign property investors, its economy does pose some risks.

 

Jakarta, Indonesia

Jakarta is experiencing an influx of development at the moment and is a market investors should be seriously considering. The city has a growing middle class and an emerging economy. Jakarta’s population is expected to exceed Tokyo’s by 2027, already has a housing backlog of 11.4 million units and a youthful population with 85% under 55 years old. It is worth noting that Sotheby’s opened an office in Jakarta earlier this year. Despite a disappointing performance from Jakarta’s property sector in 2017 the prospects for late 2018 and 2019 are looking brighter as more of the government’s infrastructure projects are completed. For several years investors have adopted a ‘wait and see approach’ to buying in Jakarta but there is an opportunity for smart investors who can see the capital growth prospects it has to offer.

 

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