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.
