The property market in the UK is apparently in a downward phase of its regular boom bust cycle, with would-be buyers utterly confused about which way mortgage lending, interest rates and property prices are going to go in Britain. This fact alone has seen a significant rise in the numbers of Britons actively contemplating buying property abroad in order to secure a solid investment.
Real estate is a consistently sold investment if held for the long-term – everyone knows this. However, timing an entry into the property market in Britain when everything is so confused is difficult which is why, according to a survey by Moneycorp, up to a quarter of those thinking about buying now are thinking about buying abroad.
Certain nations have fared far better than the UK in terms of being affected by the fall out from the global economic crisis, which means certain nation’s real estate economies currently represent a potentially more stable investment environment. Other nations have been harder hit and clearly crashed, in such countries property can constitute a bargain. Therefore, in this report we’re going to discuss the 5 hotspots for property abroad if you’re currently seeking bargains or searching for stability.
1) Property in Spain – Could Constitute a Bargain
Britons have already cottoned on to the fact that there are bargains to be bagged in Spain following the collapse of their property economy because according to Primelocation, Internet searches from Britons for Spanish real estate have increased by 151% year on year to June 2010.
Spain’s property economy was the first global market to collapse in headline grabbing style, and yet the desirability of Spain as a place to holiday, live abroad or retire has barely diminished even in the face of a strong euro versus a weakened pound for example.
Britons have seen first hand what an investment in Spain’s real estate economy can bring if held for the long-term, and those who wish they’d bought in 15 years ago are now rubbing their hands with glee as they are effectively being given the chance to roll back the years in terms of property values. Those who want a holiday home, a home for life or a solid investment property that they can rent out for maximum returns are looking at frontline or high grade developments that have already been completed and which are located in well established communities.
2) Canadian Real Estate Market – Stable Investment Environment?
Canada has quietly weathered the global economic storm very well – it has kept its economic head down and its political nose clean and come out the other end of the depressed cycle in a strong position. To say the nation has been untouched by the crisis is wholly wrong, but to say its real estate landscape has remained firm in the face of financial developments is fair.
Canada is a popular choice with relocating Britons because the main language spoken in Canada is English, culturally the nation has many similarities to the UK, the people are accepting of immigrants from the UK on the whole, and there is still a strong employment landscape in Canada (again, relatively speaking). All of these facts add up to make Canada an appealing consideration for Britons looking to invest for the long-term for stable capital appreciation and consistent rental returns.
It also means that Canada continues to attract many applications annually from Britons who would like to make the country home, and many successful applicants go on to invest in real estate in their adopted nation because they see it as a stable way to invest their capital.
3) Australian Property – Desirable and More Stable
According to Moneycorp’s aforementioned research, Australia is the top choice with the Britons actively looking to buy property abroad – a combination of the lifestyle in Australia coupled with its more stable economic progress through these recent turbulent times has meant that for Britons, real estate down under is an appealing choice.
The currency in Australia has also led to this nation’s star rising in terms of its property’s appeal – compared to the pound and the euro it has been much more stable and many Brits are really looking for the most stable haven for an investment at this point in time.
Property in Australia does not constitute a bargain in relative terms – however, it can represent a good, solid long-term buy if researched well. Location is an important consideration as is over supply – but for Brits also thinking of moving to Australia, buying a home there is almost a no brainer.
4) Property in France – Evergreen Investment
Despite the strong euro (in relative terms), the cost of actually buying a property in France, talk of an increase in capital gains tax in Europe and the fact that owning property in France is almost unfashionable nowadays because ‘everyone’s already done it!’ – French real estate can be an excellent purchase when done correctly.
Firstly there is huge mileage in terms of holiday lets in France – because demand is consistent and strong. However, you need to buy the right property in the right location, (within an hour of a well serviced airport for example), and you need to be aware that your tax return in France for rental gains will be complex and you should factor in the expense of an accountant when working out what your net gains will be!
Secondly you can still buy well-priced property in France – you do have to hunt and negotiate hard and you will probably have to be prepared to update and upgrade any real estate you do buy to make it appealing to rental tenants if you want to enjoy the best returns. However, an investment in a property in France can be a very slow burning, steady commitment that can return you decent capital appreciation as well as rental income.
5) American Real Estate – Bargain Basement Deals Possible
Our final choice for your consideration is the US real estate market which, as everyone knows, has crashed significantly. The American property market has seen an increase of 200% in terms of the amount of potential buyer interest via the Primelocation website in the last year – and foreclosure auctions are the number one place to buy your bargain basement property.
If you buy in a popular tourism hotspot such as Florida for example, whilst you will be competing for rental tenants you will have a higher chance of achieving solid rental returns from holidaymakers. Alternatively, if you buy within reach of a central business district in an affluent town or city you can potentially attract professional or corporate interest.
You need to research your property choice carefully and ensure you’re not buying in a depressed and unattractive area, or a location where there is saturation in terms of the supply of rental real estate.
As the above five examples of appealing locations abroad have shown, there are places overseas where the property market represents a bargain and/or where there are consistent and even attractive gains to be enjoyed from rental income and capital appreciation over the long-term. We would advise anyone thinking of buying overseas to tread carefully however, and to research the viability of their considered investment very well before committing to the market.
