Source: Forbes —
Key takeaways
- The housing market is a hot topic right now, and after experiencing rapid growth over the pandemic years it looks to now be slowing down.
- Experts are expecting real estate values to fall over the next 12 to 18 months, before they stabilize and then eventually recover.
- Overall returns over the next five years are expected to be between 15 – 25%, but they’re going to be lumpy.
- For investors saving for a down payment, the uncertain near term future means implementing our AI-powered Portfolio Protection hedging strategies to reduce volatility could be worth considering.
No one has a crystal ball and we can’t be certain what the future holds for any investment asset. Even with hours of research, the best algorithms and the most skilled analysts, there’s always the potential for something completely unexpected.
Like a global pandemic.
The last few years have looked completely different to what was projected before the outbreak of Covid-19, and there is always the potential for something new and unaccounted for to come along.
Even so, it makes sense to look to the future to at least provide some guidance as to the impact on our finances. It might not be perfect, but it’s the best we’ve got.
This is particularly true for the housing market. For many people, buying a home is the single largest purchase they’re ever going to make. It makes sense to really want to get it right. It also takes many years of saving and planning, which is why looking as far into the future as possible is a good idea.
Sure, it might work out differently than you’d expected, but having a plan in place at least means you’re taking steps in the right direction, regardless of the actual outcome.
So what is the property market looking like it’s going to do over the next few years?
1 Year
It’s probably not going to come as a shock that the property market is expected to soften over the next year. After a period of record low interest rates, we’ve seen a large increase in the average mortgage after four subsequent 0.75 percentage point hikes from the Fed as they tackle sky-high inflation.
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