The real estate market has been considerably unpredictable in the past year. But 2017 is proving to be quite promising when it comes to the trends that experts have predicted for the current year. Take a look at the following trends that are expected to unfold in the coming months:
1. Property prices will rise.
For starters, homeowners will be pleased to know that experts predict a continuous rise in property prices. Given the decline that rampaged the market in the past couple of years, homeowners’ equity is expected to increase at a constant rate of around 5 to 6 percent over the next three years.
2. Mortgage prices will rise.
With the increase in interest rates comes an expected rise in mortgage rates. Although the rise in interest rates is indicative of a strong and growing economy, it can be burdensome to existing borrowers, especially those who are considering refinancing their property obligations. The latter should lock in their rates before the closing process lest they lose money due to skyrocketing interest payments.
3. Loan opportunities will increase.
With the expected property price hikes comes a trend worth looking forward to – the increase in available loans, both from banks and non-bank sources. Getting a mortgage will become easier in 2017 with more jumbo loans and low down payment loans expected to be offered by multiple financing institutions.
As interest rates rise, the borrowing rate will decline. This would then push banks to make an active effort to pursue new borrowers throughout the year. With more non-bank financers entering the market, property investors will gain more opportunities to make purchases. This will also further loosen the banks' credit box, given that more opportunities for borrowing will further reduce the number of potential bank borrowers.
4. Increase in construction.
As more sizable loans become available, people’s purchasing power will most likely rise. With more individuals able to finance property investments, the demand is seen to rise across both housing and commercial property markets. This will bring forth a potential increase in development projects that are open to both local and foreign patrons.
5. Rise of smaller, more affordable home options.
And as the property market continues to shift, the changing demand will bring forth a potential rise in the development of small to mid-scale homes across the world. The market that was once satisfied only by condominium and apartment units may now gain access to other property options.
6. Foreign property investments will continue albeit a smaller role for foreign investors.
Foreign investors are always present whenever properties are available for rent or sale. The influx of these market participants will continue to prevail all throughout 2017. But experts say that the role of foreign investors in terms of profit generation will be rather limited this time around as more investments become courtesy of local investors.
7. Ease of purchase for first-time homebuyers.
With the construction of smaller and more affordable homes comes the potential influx of first-time homebuyers who have sadly not been accommodated by previous years’ property markets. With significant attention being shifted to this new market, it is expected that the process of property investing will also be eased to entice the new market, consisting mostly of millennials, to consider purchasing or renting residential properties.