- December 1, 2015: Vol. 7, Number 11

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Heavy weather: Investing in emerging markets is not for the faint-hearted

by James Buckley

By 2030, the purchasing power of the E7 group of countries will overtake that of the G7, and as of this year, Asia Pacific’s middle class will be larger than Europe’s and North America’s combined, according to PwC.

That continuing search for yield may lead some property investors to latch on to cities that promise the potential for significant growth from fast-emerging real estate markets, with Asia and Africa already firmly on investors’ watch lists. But uncertainty about the long-term performance of these markets has threatened to undermine their credentials as credible alternative investment options when compared to more developed and stable markets.

In that regard it is, perhaps, unsurprising that, for most respondents to PwC and ULI’s recent Emerging Trends in Real Estate Asia Pacific survey, the time horizon for investing is three to 10 years, with only 13.4 percent looking beyond that timeframe.

Volatility affects long-term path

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