Overseas Investment Property Guide

A 2004 UK government report discovered that there was a 250% increase between 2000 and 2004 in the number of Britons buying property abroad solely for investment purposes.

Despite the global predictions of a real estate market slow down this trend does not seem to be abating nor is it limited to the UK and Britons.

This guide explores why - over the long term - investment in property is seen by many as a way of successfully diversifying savings away from the higher risk, inconsistent stock markets.

Furthermore, if you are interested in exploring the overseas investment property market this guide examines some of the emerging markets for 2005 and an interesting commercial property investment fund.

What is the continuing attraction of property investment?

The global stock markets seem to be in decline, there is a worldwide pension crisis looming and we have uncertainty in the Middle East, in the UK the housing market is unaffordable, possibly over inflated and unlikely to bring significant returns for investors late in on the game and so more and more of us are looking further a field for our investment opportunities. 

This has led us to look around the world for the ‘next big thing’ - the next property boom.

When examining the different asset classes, property is generally far less volatile than shares and property tends to be the haven that investors flock to when other asset classes are suffering.

But what if the property market crashes?

It is true to say that investment properties can have many benefits in terms of building long-term wealth, but we must never forget that this wealth is not guaranteed!

Following the global property boom of the late 1980’s many investors learnt this hard lesson when they found their properties were worth far less than they had actually paid for them and the bottom seemingly fell out of the over-inflated market.

The bottom did not truly fall out of the market however as all property retained value; the property market simply experienced an overdue rebalance and has gone on to build from this point of stability.

Since the booming 80’s ‘sensible’ investments in property have still offered major attractions and advantages, and it is back to property that investors have turned in recent years.

Who’s buying investment property today?

With property prices in some countries soaring, and first time buyers struggling to get onto the first rung of the property ladder, many people are looking further a field for investment property opportunities.

A recent report in the UK highlighted a 130% rise in the value of farmland since the 1990’s for example - fuelled entirely by a new breed of non-farming buyers. 

With bricks and mortar property prices in the UK now so exorbitant, these non-farming buyers are looking for alternatives for their money.

They may be unable to afford real-estate investments and unwilling to risk their cash on the ever volatile stock market and so they are buying up fields and pastures to get in on the property investment game!

Others interested in property investment have been examining the property markets around the globe for value for money, return on investment, potential for growth and development, rental market opportunities and basic stability. 

With current research showing that up to one in eight Britons intend to purchase an overseas property within the next five years you can see that overseas property investment is very big business.

Where are the best overseas property investment opportunities currently?

Relatively newly discovered property markets are opening up or expanding in countries such as North Cyprus, South Africa and Bulgaria for example - where potential buyers are afforded incredible value for money when it comes to real estate.

The property market in countries such as these has been artificially restricted through the threat of war or political instability, and now with their recent history showing that they are stable countries with strong economies and populated and governed by those with a first world perspective, property investors are finding markets rich in diversity and potential.

Dubai is another country offering interesting real estate investment opportunities.  Since May 2002 when the crown prince of Dubai, Sheikh Mohammed bin Rashid Al Maktoom issued a decree allowing foreigners the right to buy freehold property there, the real estate market has exploded!

Properties available in Dubai range from modest one bedroom flats to freehold exclusive islands!  And property there still offers very good value for money - furthermore the tax and business advantages in Dubai are very appealing and so property investment in Dubai is enjoying a buoyant upward trend.

And then there are the ‘old’ favourites - France, Florida and Spain for example are all countries with a long history of investment property appeal - especially for Britons and Northern European residents looking to escape the weather and invest in a home in the sun. 

Whether you are looking to secure a home for holidays, your retirement or you are looking for a long term investment opportunity these countries still offer the investor potential for real estate growth.

When it comes to considering property as an investment vehicle it is a tried and tested method used for attempting to secure long term gains - but as with any investment, gains, returns and security of investment are not guaranteed.  Whether property investment is right for you and matches your circumstances and attitude to risk is something that you need to consider.

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