WorldWide Property

All over the world property is becoming recognized as having the best investment potential for long term capital gain as well as giving the possibility of providing a rental income if the property is not the investor’s main property for residence. Much is made of the stock market and its long term gains but remove the top five percent of best performing stocks and the figures look very different. Remove the top five percent from the property market however and we see a much better performance for property than for the stock market. If property is purchased using due care and professional property surveyors and solicitors specializing in property purchase for the area it’s difficult to buy badly or at least one would have recourse under law if the experts failed to perform. Buying stocks and shares can be a very different matter, witness the recent Enron fiasco where millions of people have been affected.

While new property is being built all over the world at an incredible pace it’s extremely unlikely that we’ll ever reach saturation point and have too much property for sale. The population is growing and the demand for property is growing at an even faster rate, in many countries that had a tradition of two, three and even four generations living under one roof the younger generations are now looking to buy their own independent properties. For those people buying investment property as a means of building a nest egg for their retirement the feeling is that they are ‘in control’ of their finances rather than some faceless, highly paid whiz kid in the financial sector.

Another factor that contributes highly to the price of property worldwide is the price of land; land suitable for the construction of property is finite, apart from very small amounts of sea reclamation we cannot manufacture it and there is only so much building land available where it’s needed. Of course we can demolish older property and build new higher density property to replace it but the infrastructure to support the extra has to be provided also. A large proportion of the cost of worldwide property is the cost of the land that the building sits on and if this is in short supply and continually rises in value so the cost of property worldwide will rise in unison.

Most newcomers to property investment, particularly if they already own their own homes (a property investment in its own right) will automatically think in terms of another residential property as the next step in acquiring a property portfolio. There are many other forms of property investment that will give equally good income and or capital return. Commercial properties for warehousing, factory units or business startup units are another excellent form of property investment. Office space can also offer very good property investment opportunities although these tend to be much larger properties owned by an association or property company and investment into this type of property is often done via shareholdings.