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Expat Investor : January February 2009
PROPERTY INVESTMENT Positive property predictions for 2009 Looking to invest in international property but don’t know where? Experience International signposts the way to four locations and explains why these still represent a bargain purchase. The financial landscape in 2008 has been dominated by dramatic declines on stock markets and currency crashes; this has resulted in instability in many nations’ economies as the very fundamentals upon which stable economic practices are built have been undermined. In the UK, we’re living in a state where inflation is rising, interest rates are falling, our currency is declining in value and property prices are stagnating. All in all this presents a pretty bleak backdrop for would-be real estate investors, as well as for those hoping to get on the property ladder. Conversely, however, in certain specific corners of the world, there are positive predictions for key property markets in 2009. If you’re wondering how you can invest your money wisely in 2009, in an asset class where there’s not only the real potential for growth but where there’s the possibility of earning an income from your investment to boot, or if you’re looking for an alternative way to get on the property ladder in the UK if your chances of securing a mortgage in the short term are limited, the news that there are certain affordable property markets around the world built upon solid investment fundamentals is very welcome indeed. According to Agence France-Presse, one nation where there is intense international investment commitment supporting a construction and real estate boom is Tunisia. In a recent report the news agency highlighted the fact that the government’s pledge to change the law to allow foreigners the right to buy freehold property in the North African country has brought corporate investors and real estate developers from locations such as Dubai and Bahrain. SteveWorboys, Managing Director of Experience International, comments, “The nation’s proximity to Europe, its increasing accessibility and underlying political and economic stability are supporting this level of investment commitment, and for an individual buyer looking for their own reasons to enter the property market in Tunisia, the nation’s tourism potential really makes it worth closer inspection. According to the World Travel and Tourism Council (WTTC), the next decade will see strong consistent annual gains in terms of activity growth of around 4%. This is because the nation's government and private sector investors are committing to a massive overhaul and diversification of the tourism product in Tunisia, and there is a national plan for the international promotion of tourism in Tunisia to 2016.” Experience International handpicks property development projects, and in Tunisia they have chosen The Dunes at El Kantaoui as being of maximum interest and potential for 2009 and beyond. The attractive low-rise apartment development has a beachside setting in a prime residential area close to Port El Kantaoui, and it boasts all the facilities one associates with the very best investment property projects, such as a 36-hole golf course, a marina, restaurants and world-class spa facilities. Prices start in the region of £20,000 for a studio apartment, making this an ideal entry-level investment. The second market that’s making the headlines for 2009 in terms of positive potential is Egypt.Mr Worboys says, “Here, the WTTC is predicting annual gains of up to 7% for the next decade thanks to the intensive investment that the tourism market is enjoying. For would-be investors this is excellent news, and according to a report in Homes Overseas magazine, favourable tax rules are another reason that investors are being drawn to Egypt. The Jones Lang LaSalle Global Real Estate Transparency Index has placed Egypt in the 10 most improved countries around the world, and we’ve identified a particularly interesting project for our investors. Oasis Marina in Hurghada is located on its own private Red Sea beach, and it boasts excellent facilities such as a range of swimming pools, a spa, diving and aqua centres and a children’s club. The development is apartment based, making it ideal for jet-to-let investors for example, and prices start from just £35,873.” Andy Parkin, an accountant from Canvey Island, chose to invest an inheritance windfall at the Oasis Marina development, and he not only benefited from a significant discount for purchasing his property with cash, but because he bought through the Experience International investment team, they negotiated him a five-year guaranteed rental income as well as guaranteed personal usage of the property for 12 weeks. He explains why he chose Egypt. “This purchase has the element of investment that I was looking for. In Egypt there is the potential for future tourism growth thanks to the 10 year plan that the government has in place and the fact that the government is inwardly investing in their country is something to watch as is Egypt's position as an emerging market.” Cape Verde is the third market under the spotlight for investors looking for the next big thing in 2009. Dubbed ‘the hidden Caribbean’ by a Lonely Planet writer, this archipelago of beautiful sun- kissed islands enjoyed annual tourism gains in the region of 15% between 2004 and 2007, according to a report on the Assetz website, and the WTTC are predicting annual increases of up to 6% in the next decade. As the accessibility of the country and its tourism develop, so it has been recognised that the potential for investment property bought in prime locations across the islands is immense. Mr Worboys is of the opinion that, “We are only just beginning to see the tip of the property investment iceberg in Cape Verde, the predictions for this marketplace are exceptional both in terms of capital appreciation and year round rental returns.We have hand picked a prime development in the best location for our investors’ interest, namely the Dunas Beach Resort on Sal. It encapsulates the best of both worlds, combining frontline sandy beaches on one side, and frontline golf on the other. Located just a short walk from the centre of Santa Maria, where there is an extensive array of beach clubs, bars and restaurants, this exclusive resort is set within lush community gardens, and all apartments and villas have amazing tropical views. The on-site facilities include a commercial centre, a spa, pools and gymnasium. This is a high-end resort of maximum appeal and apartments start from £71,452 and detached villas from £214,456.” The final market that has made a comeback for 2009 is Bulgaria – and more specifically the winter sports resorts that the nation is becoming increasingly famous for. According to a report in the Daily Telegraph, Bulgaria's ski resorts, such as Borovets, are among the most affordable and therefore popular for Britons. And with the credit crunch and high inflation squeezing all pockets in the UK, the affordability of Bulgaria makes it highly enticing. Samantha Emery from Watford chose Bulgaria for her investment property purchase for the following reasons: “I didn’t have enough money to buy a house in the UK so I decided to buy a flat in the UK and an apartment in Bulgaria to help me save to buy a house in the future. The property I bought at the Pirin Golf and Country Club in Bansko is an investment through which I gain my profit from renting – in all honesty I cannot see how the Pirin Golf and Country club will not succeed in making me money, after all it is a five star development in a prime location in one of the best ski resorts in Bulgaria.” Samantha bought her property through the investment team at Experience International,who currently have another stunning development available in the Telegraph’s ‘favourite’ of Borovets.Mr Worboys sums up its appeal, “Borovets Gardens is a luxury gated studio and apartment resort set in a stunning pine forested mountain location. It has first-class facilities such as a fitness club, sauna, restaurant and bar, and properties start from as little as £39,041. This means that this development is highly desirable with would-be tenants because of its location and superior facilities, and because entry level pricing is so attractive, the yields that investors can potentially enjoy are likely to be very handsome indeed.” For more information about any of the property investment hotspots highlighted for 2009, or any of the property developments featured, visit www.experience- international.com. January/February 2009 ? EXPAT INVESTOR 21
March April 2009