The USA was tops in residential investability potential on the basis of economic growth and market recovery potential with four Asia Pacific countries making the top-15, according Savills’ recently released World Residential Investability Ranking. The company rates the investability of each country’s property market on the basis of broad economic and demographic factors.
The Savills rankings focus on countries with cities and resort locations that have consistently attracted investor interest during the past five years. The company also noted that even within each country, the property market could be diverse and filled with good and bad places to investment.
“There is a world of difference within the USA between top tech cities and languishing rustbelt ones,” Yolande Barnes, director of Savills world research said. San Francisco was seen as one of the best residential markets in the world with Manhattan and Los Angeles also being very strong.
In second place was the UAE as domestic wealth creation and increasing demographic and regional demand continues to grow in the country. Savills noted that robust demand has finally taken the place of more speculative overseas investment that had plagued the Dubai market in recent years.
Savills ranked Singapore in third and the UK in fourth place due in part to growing population as well as economic performance and growth prospects in each country.
In the Asia Pacific region, Australia had the seventh best potential for residential investability while China and Hong Kong settled for the 11th and 12th spots respectively. Savills saw current pricing in Hong Kong and China as cyclically high and offering short to medium term investors less value then in other places.
“These are still big and investible markets, but we’d expect to see rental growth and yield movement before they once again top our investability list,” Barnes noted. “It is vital that investors understand the long term demographic, economic and supply-side drivers of demand – and therefore sustainable value – when making investment decisions. These can be different at national and local level.”
