Top International Real Estate Investments For 2009

Generous borrowing terms coupled with favorable interest rates and property prices are luring risk-averse British investors to the French real estate market. This is giving France an edge …

Generous borrowing terms coupled with favorable interest rates and property prices are luring risk-averse British investors to the French real estate market. This is giving France an edge over previous leader Spain in business reported by overseas mortgage dealer Condi. Turkey, Portugal, and Italy are also strong contenders for investment dollars, as the lure of lucrative rentals in those tourist magnets finds buyers eschewing the gamble of emerging markets for the security of time-tested ones. For more on this see the following article from Property Wire.

Overseas property investors are sticking to the more proven locations according to the latest ‘hot spots’ report compiled by overseas mortgage specialist Conti.

France has swooped into first place, accounting for a staggering 31 per cent of inquiries received by the company this year, followed by Spain with an impressive 22 per cent, despite all the recent negative reports.

Inquiries for both locations have increased considerably since 2008, as investors shun the emerging markets and put their trust in the more established destinations.

Whilst France and Spain now account for more than half (53 per cent) of all inquiries, compared with 29 per cent last year, Turkey has maintained third place in the table and  increased its share to 13 per cent. Portugal and Italy have also advanced up the table, to fourth and fifth places respectively, whilst interest in both Bulgaria and the USA has declined over the last year.

Top Ten Hot Spot Destinations

Source: inquiries received by Conti so far in 2009 compared with the same period in 2008

Country% of inquiries 2009Ranking 200% of inquiries 2008Ranking 2008% change
France31%115%2+16%
Spain22%214%1+8%
Turkey13%311%3+2%
Portugal7%44%8+3%
Italy6%54%8+2%
Bulgaria3%66%5-3%
USA1%79%4-8%
Cyprus1%76%5-5%
Cape Verde1%72%11-1%
Ireland1%72%11-1%

Clare Nessling, Conti’s Operations Director, says:
“In the current economic climate, British buyers are sticking to the more traditional overseas locations, especially those with a history of providing good rental returns.

The smart investor is no longer simply looking to where the best bargains for a swift return can be found, but to where security lies for a longer term investment.”

Vive la France!

France, accounting for almost a third (31 per cent) of inquiries this year, continues to enjoy a very stable market, primarily due to its financial system having been more cautious in the past.

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As it’s in a relatively secure situation, there’s a strong appetite for lending to foreign investors and in some cases, it’s possible to borrow up to 100 per cent of the value of the property. It has become an increasingly attractive investment option, not least because of very low interest rates (some less than 3 per cent at present), but also due to lower property prices, with many sellers dropping their prices to levels we’ve not seen for several years. It’s a buyer’s market!

The enduring love of Spain

Despite dropping into second place, Spain still accounts for 22 per cent of inquiries received, an increase of eight per cent since 2008. Buyers are in a strong position due to the number of homes available, low interest rates, and the opportunity to negotiate price reductions from motivated vendors.

Although it will continue to experience problems in areas with exposure to corrupt licensing laws or land grab issues, Spain has been at the forefront of the overseas property market for a long time, so has very strong foundations. It has a lot to offer, and you can still buy with confidence, as long as you buy sensibly and treat your property as an investment over the long term.

It seems that our love affair with this country is far from over.

Turkey – a booming property market

Often referred to as the ‘new Spain’, Turkey offers some great property prices and all the benefits of its Mediterranean location, minus the effects of the strong euro.

Tourism has risen dramatically over the last few years, with predictions that it will reach just under 30 million visitors in 2009.

This will ensure that demand for quality rental properties in the popular tourist areas will continue to outstrip supply, making rental yields very lucrative. It has deservedly maintained third position in the top ten, whilst increasing its share to an impressive 13 per cent of inquiries received this year.

Snakes and ladders

Portugal and Italy, having experienced a drop in interest last year, are both enjoying a revival, moving up to fourth and fifth places respectively. Buyers in Portugal have been attracted by lower prices – up to 30 per cent in some locations – and those who choose to invest there may be encouraged by news that it was among the countries reporting an end to their recessions in recent weeks.

The market in Italy remains strong, and property can still be a profitable acquisition if you buy in a popular area with international tourists.

Alternatively it can be a relatively safe place for your own cash if you’re happy to tie in to bricks and mortar.

The story, however, is very different for Bulgaria, where interest has dropped off significantly over the last three months. Many lenders have been involved with problematic developments there, and this, combined with an over-supply of building, has led to a big fall in valuations and banks have been questioning the asset security.

As such, Conti is currently unable to arrange mortgages in Bulgaria, and demand has inevitably decreased.

The USA has also experienced a fall in demand due to the stronger dollar making it more expensive for British buyers. And interest in Cyprus is also down on last year, most likely due to problems with title ownership, an issue which its government is making efforts to tackle.

Clare Nessling, Conti’s Operations Director, adds: “Last year, the concentration of some investors on emerging markets was starting to erode the lead of the traditional ones.

This year, the tables have turned. Buyers are sticking to locations they know and trust, but it’s not that alone; affordable prices, low interest rates, easy access and good rental yields have all contributed to the enduring attraction of these destinations.”

Overseas Mortgages

Conti is an overseas mortgage specialist, providing finance for purchasing holiday homes, investment and retirement properties in more than 45 countries, and re-financing for any purpose in 15 of those countries.

All mortgage applications are processed and underwritten by Conti’s teams of specialists, who know the exact mortgage application requirements for each overseas lender.

It can also ensure that clients are put in touch with specialists in the country in question, to enable then to comply fully with planning and legal conditions and assist with currency exchange.

This article has been republished from Property Wire. You can also be viewed at
Property Wire, an international real estate news site.

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