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Property Investment Up?

[ Posted November 30th, 2009 ]

Following the slumps of recent years, one might be forgiven for hesitating to buy a property, however the opposite seems to be true. It has recently been discovered that more people than originally thought intend to invest in property.

Barclays Wealth and Economist Intelligence Unit survey found 35 percent of people wanting to invest now are planning to increase the proportion of their investment spending on property, this was over a 2 year period. This trend was also found out on a global scale. 90% of investors plan to increase their property investment in the world’s biggest 10 markets.

So why is this?

It seems that the obvious answer would be that with the economic downturn and property market crashes, prices are now at what most investors seem to estimate to be the ‘trough’ of a downward trend; the only way is up!

One key indicator would be that the biggest markets for investment is in the US and the UK, this may be because this is still where much of the investment capital is, however China, not so strongly hit by the property market recession is also in the top investment areas.

So should you invest?

Roy Gilbert, head of the same unit that published these findings echoed the calls of others to say that one should exercise caution on this kind of investment, the property markets are still in turmoil and this feeling that things have bottomed out could actually be a false one, prices may still have some way to tumble. "Wider market data suggests that initial indications of recovery in property could be a false dawn, or the start of a slow upturn.

The next 12 months will be crucial in getting a clearer idea of what the longer term property investment landscape will look like" he said It is unlikely that prices will skyrocket as they did in the boom preceding the dip.

Looking at previous ‘bubble-bust’ scenarios the popping of an investment bubble is usually followed by a gradual increase rather than a sharp one on the long term, though there may be lucrative opportunities for those wishing to gamble a bit and look for some short term gains, now could be a good time for those wishing to invest in the long term too, even with another drop it would be likely that prices in 2 or more years will be higher than they currently are.

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