Overseas property agency Property Venture has revealed its top investment choices for the UK investor for 2010.
"Like any other investment, putting your money into property involves a
balance between risk and reward," said Louise Reynolds, Director,
Property Venture.
"Whilst we have witnessed property prices overseas coming down in many
countries and areas, we know, not all countries have been affected to
the same degree, or all the areas within a country. With some major
economies around the world struggling to shake off the recession,
investors might be wondering where to find an attractive overseas
property market, or whether such a thing still exists at all.
"Poland, Spain, Morocco, Cyprus, Bulgaria and Montenegro all offer
attractive options but the diverse nature of each country and specific
regions have their own pitfalls, if not researched properly.
"The fear of the unknown overseas market is enough to put many buyers
off, the prospect of buying overseas without understanding the culture,
language or idiosyncrasies of the country is a daunting challenge.
There is no doubt that being well-informed, means buyers are well-armed
BUT drawing on the expertise of an overseas property consultant can
make the process far more effective, by advising buyers of the pitfalls
upfront, so that there are no unnecessary surprises."
Hot Spots for the UK Investor
Poland
* Achieved positive economic growth in the second quarter of 2009, with
Gross Domestic Product (GDP) rising to 1.4% year-on-year in quarter two.
* Has become a serious alternative to outsourcing skilled labour, competing with the likes of India.
* Has attracted major blue chip firms to invest in the country,
including P&G-Gillette, Microsoft, Dell, Ikea, Siemens Bosch, Coca
Cola, Daewoo, Unilever.
* Enjoys significant inward investment through lower standard of living
and geographically proves to be an important location, as a major
distribution point at the heart of Europe.
* Has received substantial EU funding to invest in the infrastructure
of the country, building a major network of roads, linking Northern
Poland with the South via the A1 (Gdansk to Katowice, towards Vienna)
and East with West via the A2 (linking Berlin, via Posnan to Moscow,
via Warsaw).
* Poland’s GDP is predicted to grow by 2-3% in 2010 (IMF, lower forecast, BZWBK higher forecast)
Morocco
* Easily accessible from the UK, and matches investors’ expectations with a steady economy and healthy property market.
* Government-led reforms have strengthened the country’s economic
position and allowed it to sail through the global financial crisis
relatively unscathed.
* The government’s strategy is to steer the economy away from its
dependence on agriculture, to create jobs and find new engines of
growth.
* Investment in infrastructure, property and tourism has diversified
the economy, while policies to control prices have restricted inflation.
* Foreign direct investment has escalated, encouraging Moroccans to buy
into their own market – an estimated 80% of remittances from expatriate
Moroccan workers now goes into property.
* British buyers, have the added advantage of a favourable exchange
rate into Moroccan Dirhams, giving sterling real buying power.
Spain
* Official statistics from the Ministry for Housing show National
average prices have fallen 8% over 12 months, from €1780 m2 to €1634.7
m2 today (Sep 09 v 08).
* Around 1.6 million apartments and houses are on the market, (over
300,000 under construction and a further 1.1 million with planning
permission that must legally be built within two years).
* Of these properties the ratio of holiday homes to resident worker
homes vary, but as much 50% of the total of unsold stock, could be for
the holiday home market.
* At current levels of demand it could take until 2016 for the property market to recover.
* Property price declines have been more accentuated on the coast, however, inland prices have held up.
Bulgaria
* After impressive growth between 2005 and 2007, the property market
started to level off at the end of 2008 and fall in 2009. GDP growth in
Bulgaria is expected to slow in the next year.
* New buildings and sales of flats have been affected by the financial limitations imposed by banks.
* Lower loan to values are being offered, which has affected demand and
most of the buyers came from the countries hardest hit by the crisis,
such as the UK and Ireland.
Montenegro
* The Montenegrin economy has achieved impressive results over the past several years.
* Ambitious reforms, substantial capital inflows, dynamic developments
in the banking sector, position Montenegro as one of the fastest
growing European countries.
* Average annual GDP growth in the last four years was around 8%.
* Montenegro fell into recession in the first half of 2009 when the economy shrank by 3.5%.
* The global economic crisis has affected the two largest exporters in
the country, KAP (Aluminum smelter, Russian-owned KAP, is the country’s
largest exporter, with 40% of industrial production) and Nikšićka
Željezara (Steel mill).
* The Prime Minister, Djukanovic believes Montenegro will enter the
European Union by 2014 amid signs the EU is overcoming expansion
fatigue, after 2004 integration of Eastern European countries.
* The Government has ambitions for a number of government tenders in
forthcoming months, including tender for the development of
Montenegro’s longest beach in Ulcinj.
* Tourism revenues account for a quarter of GDP. But tourist numbers
declined in summer 2009 amid a collapse of the Russian economy, which
for a long time represented a key Montenegrin target market.
Cyprus
* Cyprus has weathered the worldwide economic recession considerably better than Europe, despite some recent sluggishness.
* The president of the Republic has been in talks with the leader of
the Turkish Cypriot community over the past year and the negotiations
seem to be at a critical point. There is the prospect that the
political problems of the island might be solved, although this will
not happen overnight.
* Cyprus is part of the euro area, and therefore the euro is likely to
be the common currency of the unified Cyprus as soon as a peaceful
solution is negotiated.
* The Greek Cypriot government is pushing ahead with its plans to upgrade tourism facilities in the southern part of the island.
* Cyprus property market remains reasonably robust. Although growth –
unsurprisingly – slowed in 2008, the market is broadly-based and
therefore well-placed to cope with the global economic crisis.
* There is a healthy domestic property market and, while Western
Europeans may be thinking twice about overseas property investment, an
influx of buyers from other countries such as Kazakhstan and Russia
means that the Cypriot property market has not been hit as hard as some
others. (Source: propertytalklive.co.uk )
