Figure 17 shows the countries in which our selected world markets operate and how we see various prime-city and second-home markets performing within them.
We have looked at key demand variables (population growth, wealth and economic growth) alongside supply and price levels in order to see which countries are set to perform best. We have then considered the second-home and prime-city markets, covered in this publication. We looked at each place and how they will perform relative to their country and in view of the cultural sentiment and policy considerations at work in those markets at present.
This enabled us to come up with an overall ranking and prognosis for five-year growth, ranging from ‘Substantial’ to ‘Little or no’ growth. This prognosis is based on a model of household wealth, economic growth, demand and supply balance set against a whole range of tax, policy, market-cycle and other factors.
In some cases, the prospects for the specific investment markets under scrutiny in this publication, look better than for the country as a whole due to the international nature of the market and more diverse range of buyers who bring greater purchasing power to bear than domestic buyers in more local markets. Portugal and Switzerland are good examples of these markets where low and slowing population growth limits domestic demand but where low supply levels and strong international demand for Alpine homes (Switzerland) or overseas demand and discounted prices (Portugal) makes purchase prices look attractive and improves prospects for growth.
The likely top performers are those which have seen strong population growth of an affluent population which is likely to continue. Future performance of other markets will be limited by relatively high prices (compared internationally and/or in relation to historic trends) and limited or declining population growth.