Global mall 2008
To really cash in on property abroad, your have to get in ahead of the pack. There's always a little risk involved, so real on to see which markets are a good bet for 2008. Jack Robertson reports
I f you want to make serious money by investing abroad, you need to be prepared to take a risk. There's always room for expansion in capital cities and established holiday destinations, but the secret to success lies in finding the right property in the best location and snapping it up at the lowest possible
price — before anyone else has thought about it.
The opening of a "no-frills" airline route has single-handedly put many an overseas region on the property map, and the tourism argument is widely used as a justification for buying property. But once tourists are being flown in by the bucket load, you can guarantee that the best bargains have already been snapped up.
For 2008, you can therefore look beyond France and Italy, despite the fact that demand for gites and palazzos is apparently infinite. Montenegro may still be worth a look (market watchers say it is about to become a premier summer holiday resort) but accept that you've missed the boat with Bulgaria. Portugal, despite its relatively low prices and strong buy-to-let market is old news already, and even Dubai, so hot for 2007, is now one big construction site and pretty much a done deal.
Europe
Cyprus and Germany remain hot for 2008 — how much positive news about a nation and its real estate market does a property investor need in order to commit? But it is Eastern Europe that's really worth a closer look.
Ukraine, particularly Odessa and the Black Sea coast, is a strong bet for 2008, as the country is getting back on its feet and has a history as a holiday resort for Eastern Europe. Poland is also looking good — a new European Union (EU) member, from 2006 it has received around US$13.5 billion to spend on infrastructure. Gdansk, a beautiful old town built around a port, in the same sort of unified style as Dubrovnik, is of particular interest.
Croatia is forging ahead with its progression towards full EU entry by the end of the decade. An average increase in real estate prices of 100 percent to 150 percent can be expected over the next three to five years. So far, in the last five years properties along its beautiful coastline have seen accelerated annual growth upwards of 20 percent.
Canny investors are also talking Turkey for 2008. Property prices have doubled recently, in coastal areas such as Bodrum, Altinkum, Fethiye and Alanya. However, the next focus is going to be Istanbul, the country's largest city, where there are presently chronic housing shortages. While property prices are relatively low they are rising and will continue to do so as local mortgages become available this year. Added to this, the city is preparing to be the Cultural Capital of Europe in 2010 and expects 10 million tourists to visit during the next 10 years.
Morocco and Egypt
On the brink of a tourist boom and with a stable economy, Morocco is seriously hot for 2008. Property prices are far lower than in any established European market, and the government is determined to bring in international investment. Demand is increasing so now is the time to buy.
In Egypt too, prices remain incredibly low, while the economic growth and stability of the country is high. With the tourist industry growing apace, property, particularly in coastal hotspots, is offering great potential and high capital growth.
Southeast Asia
According to Emerging Trends in Real Estate® Asia Pacific 2008, published by the Urban Land Institute (ULI) and PricewaterhouseCoopers LLP, Shanghai, Singapore and Tokyo are the three top Asia Pacific cities in which to invest in 2008. With the Olympics coming soon, Shanghai topped the list for investment prospects, edged up from its second-place ranking last year.
Singapore — the region's safe bet — rates highest in terms of overall risk, thanks to its stable legal and tax environment and future economic prospects. Tokyo is another low-risk investment environment, and a city with a tight inventory
supply and low vacancy rates.
While Malaysia, Thailand and Vietnam remain unique opportunities, with property available at incredibly low prices and tourism stronger than ever, the real buzz in Asia Pacific for 2008 is India. Growth is being driven by the country's healthy
credit market and, while property prices in the big cities have more than doubled in the past two years, the fast growing middle class is going to need a lot of new housing. Buying individual properties in India may be too risky but, given the
speed of economic growth, investing in an Indian property fund seems as good a bet as any.
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