We can look at any number of property markets around the world and see relatively strong trends emerging which sometimes seem to be endless. The investment term “the trend is your friend” has been around for many years now and there is nothing which sums up any investment market like this term. So, before we consider why property investment trends are so strong let us consider the property market.
Worldwide property market
A property in the UK will likely vary enormously in cost to an identical property in Spain. So while some properties may be very similar across the world the cost and demand for such property can vary significantly. When you also take into account currency exchange rates, economic performance, taxes and the political element, it all begins get a little bit messy. However, it all boils down to the simple formula of supply and demand.
The worldwide investment arena for property is simply an information exchange where views and opinions are disseminated. All of the information and views which go into the worldwide property market create what we see as property investment trends across the globe. If a certain type of property is more popular in Spain then the price of that property will increase but when the sellers emerge the price will likely fall. It is literally as simple as that, an exchange of views and opinions creating a general consensus.
Property market trends
How many times have you read property investment websites and publications discussing potentially very interesting trends of the future? While there does obviously need to be an economic basis behind any property market trend, if you have connections, if you are respected and you have followers, you can very easily plant the seeds.
This is very similar to the process of stock market share tips but the timescale for movement in stock market prices is very different to that of property values. If we look back at the Dubai real estate market pre-2000 it went relatively unnoticed by the vast majority of worldwide investors. However, when some of the larger property funds began to look into the subject of Dubai real estate, the economy began to grow and the government seemed to be extremely welcoming of investors, the seeds were planted. As we know, these seeds very quickly grew and even during the 2008/9 worldwide economic downturn many were suggesting that Dubai property would not be affected. Oh how wrong they were!
Riding the trends
There will be a time to climb aboard any new trend as there will be a time to leave and cash in your chips. The beauty of the worldwide investment market is the fact that whatever asset you are buying or selling the longevity of any individual trend will vary enormously. Many will come to an abrupt end when property valuations become overextended, or undervalued on the downside, but just prior to the change in direction they often look to be a dead cert.
Trends in property markets around the world change on a regular basis and if you are able to spot the next big trend at a relatively early stage you can make a significant return. The trend really is your friend because it is based upon a consensus opinion of all those investing in a particular area or a particular type of property. The key to making big money from property market trends is knowing when to cash in your chips and call it a day – don’t be greedy.