As property markets worldwide begin to shake off the shackles of the global downturn, savvy investors are once again looking for the next ‘hot spot’.
If you’re happy to take a bit of risk and want to park your money somewhere a bit different, here are five markets that are worth looking at a bit closer.
As always, do your research and seek professional advice before parting with money.
The 2016 Olympics and the FIFA World Cup in 2014 are prompting a frenzy of building and regeneration in Rio.
Brazil’s property prices rose by 23.% in 2011, according to Knight Frank, buoyed by foreign investors and a fast-growing Brazilian middle class who have access to mortgages for the first time.
Prices of beachfront flats in Ipanema and Leblon are now up there with prime London or Paris. But outside of Rio plots for modern villas can be found from £31,600.
Since the mid-Noughties boom began, Natal in B razil’s north-east has caught the attention of overseas buyers – particularly those who fancy a cheap beachfront holiday home they can use themselves.
For those with a pure investment hat on, the country’s Minha Casa Minha Vida (My house, My life) social housing scheme – which aims to build 3m properties in Brazil by the end of next year – looks set for attractive returns.
One way to benefit is via EcoHouse, a UK developer building properties in the Government-backed Bosque Residencial scheme near Natal.
Overseas investors can’t buy the properties, but they can invest in the construction, injecting £23,000 in the project to be repaid, with a 20% return, within a year. They can then reinvest in the next project or take their money out.
The project is structured in the UK and is governed under UK law. And as buyers never transfer title deeds into their name they have no concerns regarding legal processes, taxes or political factors.
A five hour flight from the UK, this tropical island archipelago off West Africa is one of the emerging destinations from the mid-Noughties to have survived.
Things went quiet for a few years and prices dropped, but it’s back in good health, thanks to the government’s “prudent management and strong economic foundations”, according to the IMF.
With annual tourist numbers expected to hit 1m by 2015, high rental yields are expected from five-star resorts on the more developed islands of Sal and Boa Vista
“The stunning scenery, superb year-round tropical climate and a great improved infrastructure are attracting a steady flow of investors and second-home buyers,” said Richard Eglinton of Acquire Global Property.
Meanwhile, Sao Vicente is a quiet, undeveloped alternative for people ready to take a little more risk.
For a place that builds ski slopes in the desert and the tallest man-made structure in the world, having a property market that lurches from one extreme to another is fitting.
Dubai’s stratospheric success several years ago was matched only by the speed at which it crashed after 2007 (253 developments are still on hold since the bubble burst).
But now it’s on the up again, especially at the top end. Knight Frank reports property prices rising by 19% in prime locations, including Downtown Dubai and Palm Jumeirah.
With a return of confidence among investors, particularly Middle Eastern buyers seeking a financial safe haven, come rising prices and a rash of new projects.
The Central Bank’s proposal to cap loan to values at 50% for expats and 70% for locals should eliminate speculators and keep the market in check.
New studio apartments in Dubai Marina, a popular spot for expats seeking long-term rentals, cost from £116,000, while a one-bedroom flat in Lofts East in Downtown Dubai is on the mar ket for £206,000.
Thailand’s economy is one of the fastest-growing in Asia and, with 22 million overseas visitors in 2012 alone, tourism is booming.
Its property market is still emerging, but there is significant overseas interest, as the Thai Government is easing restrictions for foreign ownership.
“The construction standards are far higher than other emerging markets considered for investment, such as Egypt or Brazil,” said Luke Smith, managing director of Crystal Investments and Real Estate.
And property is still low-priced in Pattaya, in the less developed East Thailand – a 12-hour flight from the UK and a three-hour drive from Bangkok.
“It’s the nearest coastal town to Bangkok, it offers the best value for money and we’re finding great interest from Russia, India and China. Pattaya has a spent a lot of money on infrastructure, which is pushing prices up,” commented Samantha Jones of Knight Knox.
“A typical completed studio will sell for £30,000, but investors who are prepared to take the risk can pick up a unit off –plan for £15,000,” she added.
Jones recommends investors buy a property with full, freehold title. “It’s the easiest and cleanest way to buy and 49% of condos on any developments can be owned in this way by foreign nationals, ” she said.
It may lack the sex appeal of Ibiza or Barbados, but Germany is doing very well without hordes of overseas property investors.
Munich is pricey (up 15% in 2012), there’s little available and the market is pretty impenetrable if you don’t speak German.
But historic Hamburg, where new apartments can be bought from around £300,000, has more to offer.
Prices are rising by 30% a year and its former port, HafenCity, is undergoing massive regeneration and interest from foreign investors, there’s big potential.
Another option is Leipzig, where a £55,000 flat in the desirable Gohlis neighbourhood has a potential yield of 5.8%.
Meanwhile, gritty, cutting edge Berlin is full of opportunity and property prices are yet to catch up with other European capitals due to low levels of ownership.
English property broker Jason Thackray recommends the Mitte district where you stand to gain a 5% yield in long-term rentals, or cultural Kreuzberg.
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