Posted: Sep 11, 2015
Continuing our new series, experts from around the world share their advice on the top places to invest overseas.
There are numerous factors to consider when investing overseas: exchange rates, long-term rental potential and property price growth. But thousands of Brits buy abroad every year. Some simply want a better quality of life, others are looking for a bolthole in the sun, while the more adventurous might rescue an abandoned French chateau.
If you are thinking of buying overseas, consider all your options carefully. The old adage of “do your research” has never been truer. Make sure you have a team of advisors on board, who can lead you through the process.
And trust your instincts at all times. If something feels too good to be true, then think twice about it. Seasoned buyers don’t just make snap decisions on the ground. They return to the UK, run the numbers and decide whether the property is right in the short, medium and long-term.
Here property professionals talk about world market movements and give their suggestions on places to buy overseas.
1. Istanbul, Turkey
“Over the last decade Turkey's housing market has thrived, attracting a vast amount of interest and subsequent investment from both domestic and international buyers. The most recent figures suggest that the property industry is still recording annual growth, albeit at a slower pace, with house price growth remaining consistent.
“With an expanding infrastructure, new ground-breaking projects under development and historic and cultural charm that is second to none. This is combined with a mesmerising feeling of east meeting west, the city of Istanbul has much to offer both the short-term visitor and the longer-term property purchaser.”
2. Ibiza, Spain
“Ibiza has to be one of the most attractive options for overseas investment at the current time. It appears to be pretty much recession proof, attracting every type of buyer, new money, old money, the young and the more mature generation. Families and the bohemian party-goers are all flocking to the white isles for a piece of the action, too. They are attracted to the relaxed hippy retreats, the hedonistic party scene or purely to enjoy the beautiful countryside and explore the turquoise water, hidden coves and sandy white bays. There are still opportunities to purchase old fincas ripe for development. However, we would suggest moving fast, this won’t be an option for much longer. The frontline villas are already achieving astronomically high price tags.”
3. Umbria, Italy
“Discernment and discretion are the two words that sum up the motives driving many foreign buyers, including some international celebrities, to invest in Umbrian property. Discernment because they realise that from the pre-crisis peak in 2007, prices on average have fallen by 20 to 25 per cent. This coupled with the renewed strength of the British pound and the US dollar versus the Euro, is beginning to create the first signs of a turnaround in the market. Discretion because they can enjoy the privacy and peacefulness that a home in the beautiful Umbrian countryside offers, while at the same time having easy access to international airports, historic towns such as Assisi, Perugia and Orvieto, excellent food and wine plus friendly people.
There is a wide offering of properties, typically well-restored stone built farmhouses, many with income-generating holiday apartments. At present, almost all advertised prices are negotiable to an extent which depends on the owners' personal circumstances.
“Natal in north-east Brazil is definitely one of the most popular choices among those looking to buy. And it is easy to see why, with a year-round sunny climate, an abundance of beautiful beaches on the coastline, growing infrastructure and a variety of real estate developments from which to choose.
Learning the rules about noise, parking and rubbish disposal, as well as understanding that times runs differently in Spain, will avoid potential issues with neighbours.
It offers low property prices coupled with an insatiable demand for quality affordable housing. The region makes an attractive investment choice, too. Brazilian Real has recently significantly dropped in value against the British pound, and this means that Brazilian property is even more affordable to purchase. Brazil is one of the eight largest economies in the world, ensuring excellent long-term potential. More savvy buyers are looking to Brazilian shores for their property purchase.”
5. Mallorca, Spain
“More visitors arriving in Mallorca have had a positive impact on the island's economy and this has pushed up demand for second homes. Many of those who visit (myself included) fall in love with Mallorca almost on first sight. Mallorca has proved to be an enduringly popular location over the years and demand for high-quality properties is high. If demand continues at this level, I think we can look forward to prices continuing to rise over the months and years ahead.
“Mallorca's appeal lies not just in its fabulous scenery and pristine beaches, but also in its connectivity. It has year-round flights to the UK and other European destinations, which make it an ideal spot for a second home. It also benefits from some good international schools and top-range facilities, as Ibiza does. Of course, the exchange rate right now adds to its attraction, with purchasers being able to get a lot more for their money."
6. Krakow, Poland
“Over the last twenty five years Poland has transformed from a state-controlled economy to one where market forces have buoyed up many private industries, which are now thriving. European Union accession in 2004 was a coming of age and the country has since become a go-to spot in Europe, seen and used as a gateway to Europe. Geographically it makes perfect sense to have a base here as a distribution hub, with ease-of-access to the West and East. It has also become a low-cost outsource centre.
Overseas agents will have a better understanding of foreign tax laws, which some buyers may not initially realise. Specialists can best explain all the implications of these regulations and which rules may or may not apply.
“In some city areas, Special Economic Zones (SEZ) have been set up and operating over many years, designed to create jobs and generate wealth locally. Krakow has benefited from status and now boasts of businesses as diverse as telecommunications, like Motorola, to Business Services giants like Capgemini and IBM. Poland is fast becoming a Pharmaceutical power hub with the likes of Pharmaceutical generics firm TEVA and Selvita. All this is positive because there are lots of workers wanting to rent apartments, so it is a buy-to-let hot spot.”
“When discussing overseas opportunities for pure investment, I would say Germany should definitely be considered. It is currently the most stable economy in Europe, but home ownership levels and prices are still very low in comparison to other countries such as France or the UK. Germany is an exciting prospect for those seeking stability and a gain, as the market begins to align with others, consequently presenting an interesting opportunity for those looking to invest in overseas property in the near future.”
8. Marrakech, Morocco
“A combination of strong governance, cultural richness, a liberal society and all year sunshine, have been a magnet for inward investment to Morocco. Tourism has been quietly growing year on year for over a decade, the property market is starting to show real signs of maturity and the country's economy goes from strength to strength. This coupled with Morocco’s tough policy on domestic security have made it one of the world’s number one emerging markets with a robust investment outlook.”
“Croatia is fast becoming an overseas property hot spot among those with a taste for outstanding scenery, sunny climes, rich history and a keen eye for an investment. Unlike the south of France or Spain, it offers high-net worth buyers the chance to escape the summer crowds that often plague well-travelled locations, giving them privacy and tranquillity that is often hard to find in today’s jet-set world. At the same time, its coastline is able to rival even the most established of other European hot spots with its clear waters, picturesque bays and outstanding views. Croatia has learnt the lessons of other Mediterranean coastlines and has introduced strict planning laws to limit development particularly on the Dalmatian Islands. With its increasing popularity as a fashionable destination a scarcity of property in good locations will drive price growth over the medium and longer terms.
10. Barcelona, Spain
“Throughout all the ups and downs of property markets, major cities always prove enduringly attractive for property investors. Spain is witnessing something of a turnaround recently, but its cities sometimes get overlooked by all the Costa searching.
“Barcelona offers holiday-home buyers all the coast has to offer, along with year-round living and the choice of the traditional or modern living. Barcelona is leading the way with the house price comeback. It has always been attractive to foreign national buyers, but now with the new high-speed rail link connecting up London-Paris- Barcelona, it is proving more alluring for the international buyer.”
11. Valencia, Spain
“Demand for property in Spain is making a come-back in places, particularly in parts of the popular coastal areas of the Costa del Sol and Costa Blanca, but there is also interest in city buying, which is seen as a safe-bet investment and more likely to hold its value.
“Valencia is on the up for British buyers and has been since 2013, when the pound started appreciating against the Euro. Valencia offers the old-town attractions along with the new ultra-modern. Its excellent climate, superb nightlife, great city sandy beach, compact walkable-centre, coupled with the ease of getting there, ticks a lot of boxes for British buyers.
“Net yields can be over 10 per cent and this isn’t just on smaller studios, normally associated with higher returns, but for three and four bedroom apartments, too. This has been achieved for a number of investors in beach districts of Malvarrosa and Cabañal, where they have bought holiday lets. There is also realistic, significant capital appreciation on the cards too, given the prices are at bargain-basement-levels. This combination of factors hasn’t been available to property investors for quite some time and is the holy-grail for investors.”
Linda Travella of Casa Travella has been selling property in Italy for 25 years. She gives 10 reasons to buy in Italy.
13. Costa Brava, Spain
“Sales in the Costa Brava in the first half of the year have been dominated once again by Northern European buyers – British, French, Swiss, Dutch and Scandinavian clients being the most active.
“Costa Brava average sales prices varied from €1,282 per square metre in Cadaques, in the region’s far north, to €1,939 per square metre for properties in Palamos (which includes the districts of Palafrugell, Taimariu and Llafranc).
“Overall, average prices for Costa Brava properties reached €1,860 per square metre, the highest average since Q2 2012. Whilst most of the sales activity has focused on properties in the €500,000 to €1.2m price bracket, we have also seen a handful of sales between €5m to 15m, suggesting that buyer confidence at the very top end of the market is also on the rise.”
14. Algarve, Portugal
“When searching to buy properties overseas, it is important to research the surrounding community just as much as the destination. Important features such as local dining, recreational facilities/services, and a sense of community are often overlooked, causing the buyer to invest in a property that doesn’t quite feel like the home they deserve. Additionally, investing in an area that takes full advantage of its year-long surroundings, is a key feature. Some properties may claim to have some of ‘the best’ beaches in the world, yet are only open to the public seasonally.”
15. Le Marche, Italy
“Italy’s Le Marche has it all. The beaches are just beautiful, the local food and wine are excellent and we have miles upon miles of rolling countryside. It's a peaceful place. Somewhere that you can lose yourself for hours gazing at the scenery or the shifting light as dusk falls across the hills, while you dine on an outdoor roof terrace.
A neighbour to the long-term tourist hotspot of Tuscany, yet far more of a hidden corner of Italy, Le Marche is a location that is growing in popularity. It is a region that offers the very best of traditional Italy: ancient hilltop towns, rich history waiting to be discovered, fantastic local food and wine and a warm, welcoming culture, yet where property prices are far more affordable than in Tuscany.”
16. Florida, USA
With closings of existing homes up by a third year-on-year in July 2015, Orlando realtors say there has been a" summertime sales stampede". Median prices are up 8 per cent year-on-year to $183,875, which is 59.2 per cent higher than the peak of June 2011.
"Feltrim Group continues to see strong demand from international investors, particularly from China, Canada, the UK and Latin America, who want to take advantage of the buoyant sector," says Garrett Kenny, Chief Executive Officer of the Feltrim Group. "Florida has just recorded record visitor numbers of 54.1million for the first six months of the year, the market for vacation and buy-to-let property is set to keep growing."