Colliers' Study on Investors Set to Boost Real Estate Market in 2016
The latest turmoil affecting global equity markets, apart from the Federal Reserve's rate hike, has pushed many investors to seek security in real estate, according to The Street magazine. In offering a safer investment with a high potential for better yields, the real estate sector still drew in investors' interests.
Real estate firm Collier's International shared these sentiments facing the U.S. property market sector.
Last year's figures showcased a strong performance for the housing industry, and this is predicted to continue to evolve into a global trend. The continued volatility in other property markets has increased the appeal of global real estate as an investment haven.
A year ago, an estimated $625 billion was reportedly allocated for direct real estate investments within a nine-month period. In this case, many investors were confident about the certainty in real estate. This was further explained in the 2016 Global Investor Outlook report by Collier's.
More than 600 investors had chosen to put in more capital in the property sector for 2016, with more than half owning multi-asset portfolios already, according to a recent survey reported by the news source.
Barrons also reported that rich investors were likely to continue looking for property markets elsewhere in the world as global high-end property prices have shot up.
Experts recommended putting their cash in private real estate debt funds, which could provide the means to get better yields. Returns for these funds were expected to range between 8 and 10 percent. Following the rise in prices since 2009, these prices are set to plateau in time.
Ben Pedley, HSBC Private Bank Asia's regional investment strategy head, said, "We see the opportunity for the next year in real estate being more residing on the debt side of the equation rather than purely on the physical assets themselves," as mentioned in the same report.