What are the riskiest property markets in the world?

[FWL]

With added risk comes added reward, so perhaps it would be interesting to list some of the riskiest property markets in the world and estimate the potential rewards. This is obviously not for the fainthearted and if you did go down this route you should only put in a small percentage of your overall portfolio funding. However, there may well be some gems out there!

 

[realdeals]

You could look to war torn countries - massive risk but potential for long term rewards. There is an old saying in the stockmarket - "when there is blood on the streets it is time to start buying". Does this apply to property markets in the same way?

 

[FWL]

Interesting article:-

https://www.forbes.com/2007/07/17/risk-housing-homes-forbeslife-cx_mw_0717realestate.html#37a4d7aa74e2

I was looking for bombed out markets but this is still an interesting article.

 

[Brian Dellinger]

My answer is more generic. The riskiest markets are those you don't understand.

 

[Longterminvestor]

Good point @Brian Dellinger

Which markets would be the most risky for you - where do your skills lay?

 

[Brian Dellinger]

I wouldn't know if it's skills so much as it is the "unknown unknowns," so to speak. That is, the things that you don't know, and that you don't know that you don't know them. Where I've had some bumps in the road so far--whether a mile away from my home, or halfway across the world--was when there were questions I didn't know to ask, or assumptions made that I shouldn't have made, and those came back to bite me later. Especially if buying in a foreign jurisdiction not only do you need a good attorney, but you need to ask that attorney every basic question you can think of. Because no matter how good that attorney may be, there may be certain things he/she takes for granted and doesn't tell you.

 

[FWL]

Interesting glimpse at some of the "hot" property markets at the moment:

https://www.forbes.com/sites/niallmccarthy/2018/04/11/the-worlds-hottest-property-markets-infographic/#69ac87724352

 

[Josh Caldwell]

Outside of actual war zones, I would nominate markets with rapid appreciation. The underlying math generally does not support this appreciation and much of the gain is fueled by speculation. Speculation is a manifestation of the herd moving in mass. The herd is stupid and it will run the other way if bad news comes to the market. When the herd runs away, you lose your $$$$.

 

[Longterminvestor]

Human emotion is the big danger - rushing to buy property at any price as "that is the fashion" at the time. This then sets these markets up for a big fall in the face of bad news/failing economies at which point they go from over bought to over sold.