Where to buy abroad in 2008 ?
Where to buy abroad in 2008
You can still make money from bricks and mortar or realise your dream of a place in the sun. But where should you invest? We profile seven of the most profitable countries for property investment in 2008
The global property market may be starting to suffer the effects of the credit crunch but experts claim there are still some exotic investment hotspots that stand out as 2008 approaches.
“There are several emerging markets with the long-term ability to cause more than a stir of interest among the more canny of property investors,” says Stuart Law, managing director of investment specialists Assetz.
He suggests it’s increasingly possible for buyers to get high returns on the cash they invest in properties abroad, while mortgages are also becoming more competitive, helping to offset any slowdown in price increases.
But where should you invest? We profile eight emerging property hotspots
Cape Verde
Tucked away off the west coast of Africa in the North Atlantic Ocean, this group of 10 tropical islands has guaranteed property investors decent returns for some time now.
The most recent Assetz Property Investment Tracker puts the typical price of a two-bedroom apartment in Cape Verde at a modest £75,000 and suggests yields (the typical rental income as a percentage of the purchase price) of 9% can be achieved. What’s more, capital gains of more than 10% are predicted for 2008.
Cape Verde boasts vibrant nightlife, mountains for walking and climbing and perfect weather and waters for everything from surfing to game fishing. Easily accessible from a number of airports around the UK, Cape Verde is only one hour behind GMT, with a flight time of around seven hours.
Murcia, Spain
The Spanish property market has been hitting the headlines for the wrong reasons recently - but Murcia appears to bucking the trend. Some pundits have been predicting the potential collapse of the Spanish property market for some time now but there are - like the UK - regional variations.
Recent official figures show that price growth in Murcia is outstripping the rest of Spain. The area saw house price growth of 10.7% to the end of September, compared to growth of just 2.1% in nearby Alicante. Latest figures suggest a typical two-bedroom apartment will set you back around £150,000.
Murcia also benefits from its Mediterranean climate, with the sun shining more than 300 days a year. Its current airport San Javier is also due to be replaced in 2010, offering another potential boon for investors there. Several other airports are also nearby, making it an accessible destination with a two-hour flight from the UK.
Paris, France
The new high-speed Eurostar train from London to Paris is not only bringing France to our doorstep, but also a myriad of property investment opportunities.
Travellers can now get between London and Paris in as little as 2 hours and 15 minutes and this shortened trip is likely to boost cross-channel commuter numbers. Think tank Future Forum has predicted there will be more than 1.5 million people working in Britain but living elsewhere within the next decade.
With property prices in France on average around 30% lower than in the UK, it makes financial sense to commute and Paris has become a popular choice for investors. A typical two-bedroom apartment in the French capital costs around £150,000, with gross yields of 7% and capital gains of 4.9% seen in the last year.
Morocco
Just three hours from the UK, Morocco offers a taste of the exotic with its lively markets, beautiful deserts and busy towns. It also offers investors a significant opportunity - Property Secrets analyst Simon Tweddle predicts that next year the country will see price growth of 10%.
Patience may be required for new investors - Tweddle suggests that while price growth may be high in some new developments, selling a property on could be difficult. “Investment is picking up but this will take time before it translates into countrywide house price growth,” he says.
Morocco also has a very favourable tax regime which boasts low capital gains tax, no inheritance tax when assets are passed on to family members and no annual property taxes for the first five years.
Estate agency Savills’ international arm has two-bedroom apartments in central Marrakech listed for under £100,000.
Alentejo, Portugal
If you want to make money from bricks and mortar, it pays to look beyond the obvious places. When it comes to investing in Portugal, it is the Algarve’s neighbour Alentejo that is being touted as an up and coming investment hotspot. The area offers all the benefits of the Algarve - such as sun, beach, culture and a laid back lifestyle – but at cheaper prices.
“The Algarve has gone sky high with prices, a lot of people can’t afford it. But this region is just above the Algarve, it has a beautiful coastline, easy access – but prices are much lower,” says Bert Snijder of estate agency Alentejo Home.
Snijder predicts that Alentejo will follow the Algarve over the next 10 years in the construction of golf courses. There are also proposals in place for the expansion of the airport at Beja in 2009, which would make the area more accessible.
The Assetz Property Investment Tracker suggests the typical two-bedroom apartment in Portugal costs around £150,000, offering gross yields of 8%, with capital gains of around 7% in the last year.
Finland
For those investors tired of sunburn, Finland offers a unique alternative to usual holiday pursuits. You can try sea or ice fishing, sledding or skiing here instead of more traditional activities.
The summer months need not be any less action packed, however, with mountain biking, horse riding, canoeing and jet skiing all on offer. The more adventurous visitor can get involved in some of the country’s more eccentric competitions, like cell phone throwing, wife carrying or cattle calling.
According to the Knight Frank Global House Price Index, Finland has seen property prices rise about 5.9% over the year to September, while Halifax Estate Agents put the average house price there last year at £92,300.
Overseas property specialists David Stanley Redfern predict Finland will see a 300% boom in the property market over the coming decade. Finland’s capital city Helsinki is a three-hour flight from the UK.
Dubai
Foreigners have only been able to buy property in Dubai since 2002, but in that time the property market has flourished. According to agents Profile Europe (UK), prices in Dubai are estimated to be undervalued by as much as 50% compared to similar “hub” cities with mature property markets, such as Hong Kong and Singapore.
With the fastest growing population in the world and expected to receive as many as 15 million tourists every year by 2010, Profile’s UK sales director Martin Bowen says the city will actually struggle to accommodate all the tourists, residents and workers - which makes it “an investor’s dream,” he says.
Courtesy of Sonia Speedy & Sky
