Connect with us

Markets

Three Megatrends Dominating Global Real Estate Investment

Published

on

The below infographic captures three megatrends that are the driving forces behind global real estate investment.

Three Megatrends Dominating Global Real Estate Investment

Three Megatrends Dominating Global Real Estate Investment

According to CBRE, the world’s largest real estate investment manager, the three trends driving the commercial real estate market can be summed up as the following:

1. Globalization

There’s $1.1 trillion expected to flow into commercial real estate in 2016, and much of that money will be stemming from international sources.

World-class cities are seeing more outside capital for all types of real estate. Take London for example, where 60% of commercial real estate has been bought by international investors over the last 10 years.

How can investors make this trend their friend? By looking for opportunities to diversify real estate portfolios across a broader mix of geographies and asset types, and by thinking globally while developing strong knowledge of local markets before investing.

2. Demographics

The world is shifting fast as far as demographics go.

Western countries will be welcoming many more retirees to their ranks. Meanwhile, the middle class in Asia will explode in growth. Once just 500 million people in 2009, it will be 3.3 billion by 2030 – accounting for roughly two-thirds of the global middle class.

Where will these people live?

Cities. About 50 megacities will account for the vast majority of economic activity. (See which megacities are growing the fastest here)

Look at investing in emerging markets that have a rapidly expanding middle class, and look for opportunities to capitalize on areas with large retiree populations.

3. Technology

Lastly, as technology becomes more ubiquitous, it will have an impact on real estate markets from several angles.

The amount of tech workers grew 61% between 2010 and 2013 among the top 15 urban centers. Also, driverless cars will also have widespread market penetration by 2029, and this will reshape and re-map entire communities.

Explore emerging technology hubs for real estate opportunities, and look for opportunities in urban-adjacent industrial properties as businesses establish distribution centers near cities to reduce the costs of delivery.

Continue Reading
Comments

Data Visualization

Assembling the World Country-by-Country, Based on Economy Size

How does the world map change if it gets assembled based on the size of economies, in ascending order of GDP or GDP per capita?

Published

on

If you had to sketch a world map, you’d probably start with a place that is familiar.

Perhaps you would begin by drawing your own continent, or maybe you’d focus on the specific borders of the country you live in. Then, you’d likely move to drawing the outlines of neighboring countries, eventually working your way to far and distant lands.

This would be a logical way for anyone to think about such a task, and it gives some insight as to how humans think about the world.

We start with what’s familiar, and build it out until it’s a complete picture.

Assembling the World by Economy Size

What if we assembled a world map in a completely different order?

Today’s two animations come to us from Engaging-Data, and they approach the world map from an alternate angle: assembling countries on the map in the order of their economic footprints.

GDP (Nominal)

The first map, shown below, uses nominal GDP to assemble countries in ascending order:

Country GDP

This version of the map shows the smallest economies first, with the larger economies at the end.

For this reason, the first economies appearing on the map tend to be developing nations, or nations with smaller geographical or demographic footprints.

For example, even though the Falkland Islands are wealthy on a per capita basis, the British Overseas Territory has fewer than 4,000 people, which gives it a minor footprint on a global stage.

GDP per Capita (Nominal)

Now, let’s take a look at the same map, constructed in order of GDP per capita:

Country GDP per Capita

This animation is more cohesive, given that it is not dependent on population size. Instead the order here is based on economic output (in nominal terms) of the average person in each country or jurisdiction.

In this case, developing nations appear first – and at the end, more developed regions (like Europe and North America) tend to fill out.

Note: All rankings here are in nominal terms, which use market rates to calculate comparable values in U.S. dollars, while omitting the cost of living as a factor. GDP rankings change significantly when using PPP rates.

Other Ways to Assemble the World

While assembling nations based on GDP provides an interesting way to look at the world, this same approach can be tried by applying other statistics as well.

We recommend checking out this page, which allows you to “assemble the world” based on measures like population density, life expectancy, or population.

Subscribe to Visual Capitalist

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

Continue Reading

Maps

Mapped: The Salary Needed to Buy a Home in 50 U.S. Metro Areas

The annual salary needed to buy a home in the U.S. ranges from $38k to $255k, depending on the metropolitan area you are looking in.

Published

on

The Salary Needed to Buy a Home in 50 U.S. Metro Areas

Over the last year, home prices have risen in 49 of the biggest 50 metro areas in the United States.

At the same time, mortgage rates have hit seven-year highs, making things more expensive for any prospective home buyer.

With this context in mind, today’s map comes from HowMuch.net, and it shows the salary needed to buy a home in the 50 largest U.S. metro areas.

The Least and Most Expensive Metro Areas

As a reference point, the median home in the United States costs about $257,600, according to the National Association of Realtors.

 Median Home PriceMontly Payment (PITI)Salary Needed
National$257,600$1,433.91$61,453.51

With a 20% down payment and a 4.90% mortgage rate, and taking into account what’s needed to pay principal, interest, taxes, and insurance (PITI) on the home, it would mean a prospective buyer would need to have $61,453.51 in salary to afford such a purchase.

However, based on your frame of reference, this national estimate may seem extremely low or quite high. That’s because the salary required to buy in different major cities in the U.S. can fall anywhere between $37,659 to $254,835.

The 10 Cheapest Metro Areas

Here are the cheapest metro areas in the U.S., based on data and calculations from HSH.com:

RankMetro AreaMedian Home PriceMonthly Payment (PITI)Salary Needed
#1Pittsburgh$141,625$878.73$37,659.86
#2Cleveland$150,100$943.55$40,437.72
#3Oklahoma City$161,000$964.49$41,335.41
#4Memphis$174,000$966.02$41,400.93
#5Indianapolis$185,200$986.74$42,288.92
#6Louisville$180,100$987.54$42,323.15
#7Cincinnati$169,400$1,013.37$43,429.97
#8St. Louis$174,100$1,031.70$44,215.56
#9Birmingham$202,300$1,040.51$44,593.35
#10Buffalo$154,200$1,066.29$45,698.05

After the dust settles, Pittsburgh ranks as the cheapest metro area in the U.S. to buy a home. According to these calculations, buying a median home in Pittsburgh – which includes the surrounding metro area – requires an annual income of less than $40,000 to buy.

Just missing the list was Detroit, where a salary of $48,002.89 is needed.

The 10 Most Expensive Metro Areas

Now, here are the priciest markets in the country, also based on data from HSH.com:

RankMetro AreaMedian Home PriceMonthly Payment (PITI)Salary Needed
#1San Jose$1,250,000$5,946.17$254,835.73
#2San Francisco$952,200$4,642.82$198,978.01
#3San Diego$626,000$3,071.62$131,640.79
#4Los Angeles$576,100$2,873.64$123,156.01
#5Boston$460,300$2,491.76$106,789.93
#6New York City$403,900$2,465.97$105,684.33
#7Seattle$489,600$2,458.58$105,367.89
#8Washington, D.C.$417,400$2,202.87$94,408.70
#9Denver$438,300$2,139.02$91,672.45
#10Portland$389,000$1,987.37$85,173.08

Topping the list of the most expensive metro areas are San Jose and San Francisco, which are both cities fueled by the economic boom in Silicon Valley. Meanwhile, two other major metro areas in California, Los Angeles and San Diego, are not far behind.

New York City only ranks in sixth here, though it is worth noting that the NYC metro area extends well beyond the five boroughs. It includes Newark, Jersey City, and many nearby counties as well.

As a final point, it’s worth mentioning that all cities here (with the exception of Denver) are in coastal states.

Notes on Calculations

Data on median home prices comes from the National Association of Realtors and is based on 2018 Q4 information, while national mortgage rate data is derived from weekly surveys by Freddie Mac and the Mortgage Bankers Association of America for 30-year fixed rate mortgages.

Calculations include tax and homeowners insurance costs to determine the annual salary it takes to afford the base cost of owning a home (principal, interest, property tax and homeowner’s insurance, or PITI) in the nation’s 50 largest metropolitan areas.

Standard 28% “front-end” debt ratios and a 20% down payments subtracted from the median-home-price data are used to arrive at these figures.

Subscribe to Visual Capitalist

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

Continue Reading
Standard Lithium Company Spotlight

Subscribe

Join the 100,000+ subscribers who receive our daily email

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

Popular