PROPERTY investors are expected to shift their attention from developed countries this year and focus their portfolios on emerging markets instead, such as the Philippines, where risks are lower, a top property listing site said.
Lamudi Philippines listed the top trends it sees in the real estate sector this year, one of which is the expected move of property investors to emerging markets.
“A smart move for the new year is to hedge your investments in Europe and the United States,” Lamudi Philippines said. It described 2016 as a “challenging” year for the property sector due the uncertainties brought about by two global market issues, Brexit and the U.S. presidential election.
“Anyone thinking of buying property became hesitant and decided that it was more prudent to wait until there is more clarity about how these unexpected events would affect the market,” Lamudi said.
“Buyers in Mexico were worried that a wall might be built, sending the country into an economic recession. English investors were concerned that the inevitable departure from the EU would be cataclysmic for the domestic property market,” it added.
Citing data from the International Monetary Fund (IMF), Lamudi noted there is hope for emerging markets. Earlier this week, the IMF said economic activity “is projected to pick up pace in 2017 and 2018, especially in emerging market and developing economies.”
Lamudi forecasts that construction activity in the beginning of the year will be slower, but will pick up in the second half of the year.
“In many cases due to difficulties securing construction financing and the cash required to purchase prize locations, there is now a situation where investors will look to avoid risk more so than usual,” Lamudi said. “In brief, this will create a calm market, where real estate prices remain stable.”
Another trend Lamudi also expects to see this year is the use of unmanned aerial vehicles or drones to market properties to real estate buyers and the spread of smart home technology and multi-use spaces.
“Real estate agents will look to gain an edge over competitors by providing flyovers of properties for exclusive properties and agents,” Lamudi said.
On smart home technology and multi-use spaces, it said, “Owners of versatile buildings can benefit from finding the maximum rent from the ideal tenant, whether that is through offices, retail outlets, or residential blocks,” Lamudi said.
“Flexible leases will become more common in a coworking type of arrangement,” it said, adding that having various tenants occupying a building is an ideal way for owners to get the full rental income while companies can engage in knowledge-sharing.