Updated: Jan 7, 2022
During a global economic downturn, like the recent U.S. Credit Crunch Crisis and Eurozone Debt Crisis, those who are not affected by it such as the Asian nations are purchasing more properties in U.S. and European countries, as the properties have become relatively cheaper than before the crisis.
Another driving factor is that globalization has enabled more people to access information easily via the internet and travel more frequently due to cheaper air fares. More parents who are sending their children to study overseas are buying local properties for their children’s accommodation abroad.
Another game changer is that due to the stringent requirements of borrowing locally and the cheaper properties abroad, many real estate agencies and investors are taking a step further to set up joint ventures or collaborate with developers / builders in these countries to establish cross border real estate buy-sell or establish non-conventional investment collaborations.
Another catalyst for the global REI (Real Estate Investment) is that since the recent uncertainties in the world financial markets, many investors in these markets are transferring their funds to tangible assets like gold and properties as hedge against future losses.
Despite the potential property bubbles, many parents are still buying properties for their children as future education fund and also worrying that their children may not be able to afford to purchase such properties in the future.
Some countries are also allowing foreigners to wholly own freehold properties and even land that are often cheaper than foreigners’ home country, especially if the cost of living in these countries is much lower compared to the foreigner’s home country.
The awareness of global REI is also driven by international real estate agencies and developers who have aggressively organised road shows and awareness campaigns in foreign countries to entice foreigners to invest in another country.
Developers and real estate agencies are forced to become more creative in these challenging times given the slowdown effect upon achieving their sales targets in their home country. Some have even gone as far as organising holiday property trips for their potential purchasers in various investment groups to attract them to purchase properties in their projects.
Therefore, it is very important to understand what is REI, the pros and cons, the capital outlay, the risk, the exit strategies, the real estate governance law, the real estate tax, the property type, and many other areas that are equally important that ultimately determine good or bad investment.
To be continued… Some advices that may change your life…
“Your best investment opportunity won’t fit into a safety deposit box, but you can live in it.”