According to new research released by Scope Investor Services, Australia has been ranked the safest country for real estate investment followed by the United States and the Netherlands, while Venezuela has ranked as the least safe.
Their analysis of 52 countries from the global real estate market report puts Germany in fourth place, then Switzerland, and the UK in the sixth place.
Argentina is ranked as the next riskiest country after Venezuela, followed by Russia, India, Brazil, and Turkey.
The managing director at Scope Investor Services, Wolfgang Kubatzki says of the reports findings: ‘After nine years of strong and often double digit returns, real estate investors face a daunting task while guarding against a market correction, if not recession, in 18 to 24 months’ time.’
The report points out that cities are competing to attract young talent and high-tech companies to create technological innovation hubs to create more diversified portfolios as protection against future downturns.
The report also suggests that real estate markets faces robust demand side factors such as steady labor markets, rising incomes, and population growth.
It adds that over-supply is not a widespread problem yet, with the exception of some cities outside of Europe and North America such as Sao Paulo, Jakarta, and Shanghai. In most markets, levels of construction activity have been modest for a while. Others are near their peak in the development cycle.
‘Investors also need to assess where individual markets are in the real estate cycle, characterized by local trends in rental growth and vacancy rates. When it comes to office real estate, cities in the early phase like Seoul and Warsaw and late phase like London and Shanghai may offer investors opportunities to capture future rental growth even as a downturn looms,’ they concluded.