As prices become attractive, it’s just right time for high net worth individuals (HNIs) to find good value for their money, by investing in REAL ESTATE options, which would benefit home buyers too. The necessity for housing across the world raises the question as to whether there should be more investment in real estate.

            Experts think that the next two to three years are best for private equity investments as we will see more realistic valuations post sub-prime fallout. Developers say the asset bubble has burst and these are the best times for private equity investment. The demand for urban renewal and modern housing is expected to remain strong for another 25 years. As US and European markets have stagnated, they do not give much room for growth. The attention now turns to developing markets which are user driven, where demand will grow faster and give much better returns. Naturally the emerging markets will become the new destination for HNIs. It will, in fact, be the safest haven for real estate.

           Though many investors are keen on putting money into third world growing nations, they are only carefully evaluating the opportunities but not committing, why?  Industry experts feel, depending on which market falls at attractive levels and offers good products and remunerative appreciation, investment will come in accordingly. Private equity and fund managers will explore distress sales, least risk opportunities and will commit and diversify to segments of best choice within real estate, such as logistics, front office, hospitality and SEZs in top cities and good locations. The caveat would be to look at established and capable players in the field where project sizes would also be smaller, with private equity bringing in more partners to de-risk themselves.

             Developers have realized that rather than acquiring 10,000 acres of real estate they need to buy 100 acres and develop it fast. Demand is there at a price, people need homes quickly before onslaught of another round of price rise. Last year they were scared of the prices, but now they are probably looking for a house with prices crashing. As property prices play a much more significant component than interest rates in impacting real estate demand, the present decline in the prices could revive customer interest and catalyst demand. It’s up to private equity and HNIs to explore when to invest in emerging markets where they can get maximum returns!!

             They will find good value here, adding to it is the dollar appreciation which will enable them to get a better price. Private equity will continue to invest as prices become more attractive and they get the right property and asset to invest in. Realtors are also hopeful about the market making a comeback. In the past few years the market was manipulated by speculators mainly in US, causing bankruptcy. Elsewhere as people preferring to buy homes are users and investors the market will find stability. Speculation will be curtailed to a great extent and the end user will be benefited in the long run.

             This will facilitate growth, of course not the speculative rise in prices but there will be enough return both for investors and realtors. For the end user private equity investments will help as there will be volumes in the market and transparency due to competition, which the end user could never gain in the thin market.