It is quite apparent that 2008 has proved to be a rather testing year for all sectors of global investment and not just property. The changing of the global climate brings around new opportunities and our goal at Yes Invest is to work harder and smarter so our clients do not have too.
There is no doubt that many of the major economies across the world have taken a turn for the worse, however there are still emerging economies that are growing along with property prices albeit at a more controlled rate.
These emerging economies are to some extent shielded from the credit crisis and to some extent have decoupled themselves from the rest of the global economy. In a recent survey by investment company Goldman Sachs it was deemed that globally we can expect GDP growth of around 0.6% in 2009. The 0.6% growth is derived from the projected GDP growth of 4.7% in the so called BRIC economies. The so called BRIC economies contribute to over 15% of global GDP and so therefore are in a much stronger position than many developed economies. Goldman Sachs predicts that emerging markets will be the only source of domestic demand growth globally for 2009.
Many investment companies adopt the view of investing in tried and tested, so called safe markets, however in our opinion it is these markets that are more vulnerable to the global economic downturn. For e.g. the US and UK housing markets, these markets were for many years considered to be the safe option for UK investors, dependable markets that would deliver dependable returns, and for many years this was the case. Although it is only a matter of time before they return to buoyancy, if we were to look at the performance of these markets in contrast to that of an emerging economy one quickly begins to see how properties in the so called “safe” markets have fallen at a much faster rate >>
in comparison to many of the emerging economies. For this reason we believe that for the foreseeable future it is important to focus investment in emerging markets and capitalise on the returns that these markets offer and then as and when the safer markets return to strength, one should move your money accordingly.
One positive thing to take note of is how government attempts to counteract recession in the various developed economies.
In the UK for example we believe the government have taken some very positive steps with both their monetary and fiscal policies, both by bringing forward public spending initiatives in a bid to create more than 100,000 jobs and bringing down interest rates. The reduction of interest rates has led to a contraction in household debt which in turn has led to a discernible uptrend in the personal savings rate. No longer is it prudent to save money with banks especially if all they are offering a very low interest rate on savings.
The UK government have also taken some very positive steps towards improving the state of the UK housing market by increasing the threshold levels of stamp duty making it easier for first time buyers and investors to purchase properties. This will almost certainly help to speed up the turnaround process and with interest rates tipped to fall below 2% in the beginning part of the year Yes Invest anticipates a bottoming out of global property prices towards the middle of 2009 before the recovery starts.
Recently however there seems to be the creation of a new property market within the UK industry, a market that is attracting investors from all over the world. This market is BMV property (below market value) and usually refers to properties that are either bought at auction for significantly less than what they are actually worth (although some sceptics would suggest that the price at auction is the true market price). We at Yes Invest have researched this market thoroughly and have concluded that there are some very good returns to be made for investors providing all due diligence has been conducted.
We at Yes Invest have concluded that this market is extremely lucrative and with the right guidance and access to some of the best lists of repossessed properties investors can take advantage of some great wealth building opportunities. For this reason, Yes Invest has deemed this area to be a huge focus area for our property investment team.
In conclusion, whilst it is tough out there at the moment we believe that with the right guidance and right advice investors can successfully guide their way through the credit crunch and capitalise on the current bear market where nervous investors seem to have all but disappeared. Whilst market conditions are not ideal there are still some economies that are growing and delivering substantial returns on properties and it is these emerging economies that investors should focus on. Yes Invest specialises in packaging deals to meet investors need.
