Finding a less obvious real estate investment choice for 2017 is a challenge. Global markets are struggling and the more recognized cities are saturated with buyers. Casting your net further afield could be the answer to higher returns. From Vietnam to Pakistan, these investment hotspots warrant a place in your real estate portfolio, whether you are saving for retirement or just looking for reliable rental returns.
As the exotic and compelling Vietnam opens up from a controlled economy to a ready-for-business market economy, it presents great opportunities for real estate investors. As big Chinese manufacturers continue to relocate their manufacturing base to Vietnam, it is predicted the country will overtake Indonesia and Thailand in the long term. While many investors are entering the market as part of a greater Asian fund, others are putting their money directly into real estate. Vietnam is experiencing a construction boom in part due to the change in the law in 2015 to allow foreigners and overseas Vietnamese to own, sell, and transfer property. According to Savills World Research, dwelling sales surged by 193% in Q3 2016 from the previous year.
Average apartment price: US$ 1,500 per sq.m
Nations with a turbulent history such as Cambodia often have something to prove. Economically the country has rebounded with a ferocity only seen in countries with a chequered past. Impressive domestic demand has stimulated strong economic growth in the last several years reaching 7% in 2016. The capital city—Phnom Penh—has caught the eye of international property investors hoping to cash in on the booming condominium market where prices have swelled by 7.5% in the year to Q3 2016. The high-end sector is the star performer and received a fillip similar to Vietnam when foreign ownership was granted for purchasing apartments and condominium units.
Luxury apartment price: US$ 3,200 per sq.m
The land of the Cortés and Aztecs has intrigued adventurers for decades, but now global investors are taking a closer look at Mexico, a country that has been underrated as an investment hotspot for longer than it deserves. Property prices have been on an incline in recent years in particular coastal regions. But be wary, Mexico spans nearly 2 million square kilometers and many towns, and smaller cities suffer from poor infrastructure with badly built roads and few, if any, motorway connections. One way that many investors enter this fast growing market is through real estate development projects: companies that buy parcels of land obtain the necessary permits and sell houses and condos usually built around a central theme.
Using online real estate platforms is a good way to find good value realty developments throughout Mexico. The Mexican housing market performed very strongly in 2016, buoyed by a growing economy. Foreign investors tend to buy smaller 150 sqm condos in upmarket areas like Polanco. Knight Frank included Mexico in its top 10 fastest growing property markets in the world with prices up as much as 8% in the year to June 2016. One thing is clear it won’t be under the radar for much longer.
Average apartment price: US$ 1,852 per sq.m
Very much a diamond in the rough for international investors, Pakistan promises high returns for relatively higher risk. Recently the country has stabilized politically and the USD 700 billion real estate sector has taken off. Those looking for deals in the capital city of Islamabad will turn to Bahria Enclave—a centrally located housing development—that offers a high potential return on investment. Karachi and Lahore are also enticing propositions for those hoping to buy in Pakistan. Real estate investment trusts (REITs) are a new addition to the investment landscape and are a good option for those with lower risk tolerance.
Luxury apartment price: US$ 1,632 per sq.m
*Average price data from www.globalpropertyguide.com