With no end of negativity, glossing over facts and clinging to any glimmer of hope in order to create an appealing image of markets in pure turmoil, 2009 has been a year of straight forward decline in the majority of world real estate markets. Although it appears to be dismal for most buyers, the reality is that property sector is making significant steps the world over as a continuous effort to move forward.

2009 has seen the emergence of a buyer’s market, which may not be the ultimate position for those who are affected by job losses and unable to access financing, yet for those with the available equity, the world’s real estate markets have become their playground.

The growth or downfall of a real estate market will create either a buyer’s or seller’s market. As demand for housing and property prices go up, it is considered a seller’s market, where benefits abound for those in a position to ask almost any price they deem fit for their property. The current position of world real estate has developed into a buyer’s market. The dropping of property prices to bargain levels, lack of accessibility to loan financing and economic issues forcing owners to sell as fast as possible has enabled buyer’s to benefit in a way that hasn’t been seen in many years.

Predictions for real estate markets in 2010 will vary around the world, yet the overall view is that during the first half of the year is when markets still following a downturn pattern will begin to reach their plateau. As sales volumes begin to rise, the difference is not expected to be greatly significant in comparison to 2008. The small recoveries will be declared as significant steps in overcoming the crisis, yet dips and peaks will vary month by month in a slow overall inclination pattern.

Genuine growth patterns are not expected to be seen until the following year, yet the changes adopted in many countries to counteract the devastating effects of the downturn will take effect in 2010, establishing a base for future growth rather than continued falls. There will be some markets that appear to rebound considerably well during 2010. These are markets that had taken initial steps to avoid excessive downturns, such as highly regulated mortgage markets and restrictions against excessive speculative buying.

Buyers looking into markets for significant capital appreciation potential will be limited for short term returns. Buy-to-let properties entered onto the rental markets are becoming the strongest contenders for receiving returns on investments over the coming years as the property markets stabilise. Both long and short term lettings are increasing in demand, although optimising properties for the rental markets will provide owners with a competitive edge against a possible influx of owners entering the letting market.

2010 is considered to be the optimum moment for investors to purchase properties in their chosen markets, as the mid to long term returns will produce significant results. Maintaining a close watch on the real estate sector in the region of personal interest will enable a closer view of that particular market. Although it is expected that some market will continue to fall slightly through the beginning of the year, it will be impossible to know exactly when the market has reached its lowest levels. Buyers who have been holding out for the right moment to make their purchases will find 2010 to be the optimum moment.

A swift recovery in the hardest hit markets will be an unrealistic expectation. The past year has seen efforts made to establish, control and stabilise the factors relating to the market and economic downturn. The results from these changes will be felt during 2010 to create a platform for the market and economic recuperation to former levels of strength.

Markets differing with excessive supply against those with the demand exceeding supply will see distinctive differences in the speed of the recuperation process and gain potential. Investing in a market with an excess supply of housing will take longer to realise capital gains growth compared with markets with a strong demand.

The mortgage market has been a big factor in the downturn of the real estate market and the reforms in lending will be a large factor in the extent and speed of the recovery. Following many years of excessive lending and a lack of criteria assessment has lead to one of the main causes of the falling markets. Investment regions such as the USA and Spain have witnessed the unfortunate results of excessive lending, leading to severe downturns in these markets. Other regions such as Canada and Australia, where lending criteria has traditionally followed strict regulations, have been affected by downturns yet to an easily controllable extent.

Financial providers have adopted stricter regulations for accessing credit, making it harder for many potential buyers to access mortgages. As interest rates have been dropping to the lowest levels seen in many years, the situation has become frustrating to those unable to qualify for loans in the current market situation. Buyers able to access the mortgage market will benefit from low interest rates while the central banks keep rates at a minimum in an effort to assist in reviving the markets. Changes in interest rates are not expected to be carried out until mid 2010, when inflationary pressures are expected to cause the demand for the increase of loan interest rates.

Investments in Emerging Markets

A sharp drop in speculative buying has caused a standstill in many emerging markets, leading to problems where economic growth has been reliant predominantly upon foreign investments. Reforms in several emerging markets will be taking place during 2010 in efforts to create housing accessible to the domestic market for a sustainable recovery. Limited mortgage availability in emerging markets have assisted to cushion the potential dramatic effects of the financial crisis, while growth developments of mortgage markets in these regions will draw renewed interest from foreign investors.

Emerging markets offering the most viable investment options for 2010 are countries offering real estate sustainability. Destinations attractive for the buy-to-let market with strong rental demand appeal will provide the greatest attraction for 2010. As excessive construction ceases in efforts to avoid the oversupply of housing on the current market, stability and recovery of emerging markets will lead to renewed appeal with growth potential from the strong demand against supply ratio.

Investments in Established Markets

The economic conditions that have caused the real estate sector in established markets to decline are beginning to stabilise and reform. Many of the markets that undergone the fastest growth over the past years have also faced rapid decline, set to experience the strongest price corrections in the coming year. These markets are likely to go through a stagnation period during 2010 before entering a genuine recovery period. Other markets having followed a long term growth trend prior to the world economic crisis are more likely to see a recovery period through the later months of 2010.

The markets showing significant recovery and growth over the coming year will be in areas of strong demand that have been traditionally stable, such as city centres. However, full recovery to previous peak levels is expected to take at least another year to achieve, even in the strongest markets.

In conclusion, long term investments are the sensible approach in the current world market and are considered to be the best investment option for generating profits. Speculative buying in emerging markets is expected to cease for a while, only to grow once economies begin to recover and the high gain, high risk markets begin to take appeal once again. Markets strongly affected by credit issues are unlikely to see recovery during 2010. The strongest economies predominantly located in established markets will experience significant recovery from the recession, making 2010 the best moment to invest while the prices are at their lowest, enabling excellent growth potential.