Lawrence from Singapore asked me this question today:
Hi Loxley, I’m looking for a property investment that will give me a fast return and long term capital growth. Is there anywhere in the world where this is possible?
This question is easy to answer. Yes.
Firstly, to find this country you need to look at 3 numbers.
In property investment, most people focus on the positive numbers
They look at property price growth, increases in rental yields, capital growth and so on…
They also look for positives in economic numbers.
A rise in consumer spending, more people in jobs and so on.
They may even look at the amount of money that has been pumped into national economies by governments keen to inflate their way out of trouble.
Yet in this market we are looking at numbers firmly in negative territory.
These are the ones I prefer to focus on because they tell us more than any growth chart can.
These numbers are so far below zero it will be years before they enter positive territory.
Yet it is these numbers all in alignment which make this country the best buy-to-let market in the world.
That country is the USA. The only country which has all these below zero numbers in the right places.
Let me give you the positive news.
Property prices in the USA increased by an average 9.3% in the previous 12 months.
However there are other countries such as India that have seen property prices increase further.
What the USA has that others, including India, don’t however are three indicators:
House prices are over 20% down on 2007
Rents are 8% undervalued
Homes are undervalued by 21%
Each of these numbers represents a gap that must be bridged before returning to their long- term average.
This means we can expect growth to continue for at least the next 12 months and beyond as stability returns and investors continue to profit from high rental yields and strong capital growth in the USA.
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