Will Real Estate Represent a Viable Investment in 2015?

Will Real Estate Represent a Viable Investment in 2015?

 If you were an investor looking to diversify your existing portfolio in 2015, the current economy may serve as something of an enigma. While consumer confidence and business spending may have dipped slightly at the start of the final financial quarter, for example, in the three months prior these factors drove GDP growth of 0.5% in the UK.

Despite this, however the overall growth rate in the UK was held back as imports rose at a significantly faster rate than exports. As exports subtracted 0.9 points from the GDP in the third financial quarter and the property market also began to cool, experts have suddenly become concerned that the economic climate will worsen before it improves in the year ahead.

 Is Real Estate a Viable Investment Option in the Current Climate and beyond?

There has always been a strong correlation between the performance of the property market and the wider economy, and this was underlined when the sub-prime mortgage collapse in the U.S. triggered the onset of the Great Recession. The psychological scars of this financial crisis continue to trouble investors to this day, with the result that many are unwilling to commit capital into such a volatile and supposedly high-risk asset. This may represent a false economy, however, especially with so many national and regional markets experiencing growth at present.

With some predicting that the UK economy will rebound and consolidate from the beginning of 2015, there is a sense that the real estate market will experience simultaneous growth. According to industry experts such as Morgan Randall, investors can expect to profit from their real estate portfolios in the next twelve to eighteen months. This may even translate into total returns of up-to 20% for investors, which would represent significant gains given the sluggish market growth of 2011 and 2012.

 The Bottom Line for Investors: Should they Sink Capital into the Real Estate Market?

 These potential returns are impressive, while it is also important to note that opportunities are accessible across both the public and private property sectors. With the construction sector also brimming with demand and experiencing significant growth, it appears as though the real estate market in the UK has finally been grounded on solid foundations.

This is perhaps the single biggest factor in the current market, as Britain has already endured a painstaking process of recovery, sluggish growth and ultimate redemption in the wake of the Great Recession. While this has been difficult, it has also been necessary to avoid the mistakes of previous governments and facilitate long-term growth. With this in mind, investors with a healthy appetite for risk may now want to consider real estate and a viable and profitable option.

From Vickie Harrison

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