[size=50:stzlm4bb]FT.com October 22 2010
Hot or Not ????
October 22 2010
From luxury developments in hot spot Brazil to seaside resorts in Bulgaria and property exchanges in Cyprus – these were just a few of the developments being marketed at a recent property investor show.
Yet, while recent research from Knight Frank has found that wealthy buyers across the globe are planning to invest more in residential property, analysts warn that investors should research the location of any overseas purchase, as many countries offer little value. We look at where to buy and where to show caution.
Buy
Brazil: There has been a marked increase in interest from British and international investors in Brazilian property this year, driven by the country’s growing economy and strong economic fundamentals.
“Brazil offers huge opportunities in the lifestyle property market. The tourism industry is undeveloped and as new flight routes open up from North America and Europe, the market is set to increase rapidly,” says Christopher Chadd of Property Frontiers, the international property consultancy.
A growing middle class has led to a surge in demand for housing, which is good news for buy-to-let investors. Property Frontiers is currently marketing a project in the north of Brazil with two-bedroom apartments available from £55,000 which come with a guaranteed 6 per cent net yield for four years.
Investors should bear in mind the strength of Brazil’s currency, the Real, which would add significantly to the cost of buying property in the country.
Florida: Property analysts believe Florida is worth a look due to price falls of as much as 40 per cent since the credit crisis.
“Buyers should look into this market because it probably represents the best value real estate in the world at the moment,” says Chadd.
Nigel Lewis of FindaProperty.com agrees. “Florida’s market is staging a significant recovery in the more desirable areas including the Gulf Coast and near to Disney World.”
Investors can achieve net yields of between 8 to 10 per cent but mortgages continue to be thin on the ground so most deals would require a cash purchase.
Avoid
Bulgarian seaside resorts were being promoted at the property investor show, but property analysts say investors should steer clear.
Pre-credit crunch, the country experienced a holiday home boom, with ski resort developments in Bansko and seaside apartments in Sunny Beach, the Black Sea coast resort. But the country is now suffering a severe housing price crash, with a massive oversupply of incomplete developments.
“It remains very risky despite property remaining cheap. The ski resorts have been a disaster and are to be avoided for the foreseeable future,” says Lewis.
Cyprus: While Cyprus is a more established holiday home zone with good flights and a broad base of buyers, its property market is in deep trouble and there are too many developers, many of whom are struggling, says Lewis. This is evident from developers offering “rent-to-buy” schemes and property exchanges. The generic nature of the developments mean many investors are finding it impossible to sell in a market full of similar properties.
Sat Oct 23, 2010 9:55 am
lets face it Cyprus for example has been over built for years but they are doing quite well and will continue to do so, and as for Bulgaria! well its early days and they are only babes in the tourist industry so give them time and they will grow to be one of the destinations that people prefer 
A lot of the housing and construction projects had been stopped which took the completed projects down by about 30% by early 2010 :shocked1:the real decline had happened a year earlier both in Yambol and Sofia who both had huge declines of around 70% on the previous year, but what is interesting to me is although these 2 places had the biggest downturn they were also the most popular amongst buyers so its no surprise that they were the biggest losers and as we all know they will also be the biggest winners too, this is just my own thoughts on the past market and what the future may hold.
