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Expat Investor : March April 2009
OVERSEAS PROPERTY Winners and losers of a plunging pound affected by exchange rate fluctuations. However, if you’re making your mortgage repayments in euros out of a sterling income, your costs will increase as the pound falls further – you’ll need more pounds to buy the amount of euros required. Conti Financial Services suggests that homeowners can protect regular euro payments against sterling’s deterioration by locking into a rate with a specialist foreign exchange broker. It estimates that around 60% of its clients who own property in Europe have euro-denominated mortgages. And with an increasing number now renting their properties out in order to generate additional income, they’re actually benefiting from the exchange rate as their rental income is now worth more when it’s converted back into sterling. It also says that many borrowers are releasing equity from their holiday homes and using the currency-boosted proceeds to pay off debt back home. One solution is to remortgage a British expatriates living on the Continent have been hit hard by the pound’s recent slide to record lows against the euro, reports Simon Conn, Sales and Marketing Director at Conti Financial Services. It’s estimated that more than two million Britons own property in the eurozone, and many of them have euro-denominated mortgages, says Mr Conn. If you’re letting out your property and receiving rent in the local currency to meet your mortgage repayments in the same currency, your ability to maintain the monthly payments won’t be Europe-based property, where interest rates tend to be lower, and use the currency-boosted proceeds to repay debt in the UK. “Remortgaging offers an alternative to people who feel under pressure to sell their property abroad because of the current economic pinch. The strong euro means demand for European property has decreased, so owners are finding it more difficult to cash in their asset,” adds Mr Conn. Mauritius defies global property market trends Geldenhuys comments, “In spite of uncertain markets and fluctuating exchange rates, it’s wonderful to see that so many of our buyers remain fully committed. This demonstrates that they clearly consider Villas Valriche to be excellent value and that the stability offered by the Mauritian economy, combined with outstanding fiscal and lifestyle benefits, are proving highly attractive in these testing times.” Villas Valriche is located on the south coast at the foot of the Valriche Nature Reserve and forms part of the Domaine de Bel Ombre, a former sugar estate. This award-winning residential golf estate is being created by international developers Secondlifestyle Group in partnership with Rogers Group, the owners of the estate for over 100 years. The estate is set in 200 hectares Despite the turmoil in the world markets, the release of Phase 2 at Villas Valriche in Mauritius has been received with great enthusiasm by buyers.Within three weeks of the launch, over 50% of the new plots at this luxury residential estate had been reserved, reports Cluttons Resorts. Nearly all of the 132 villas in Phase 1 have sold out and many of those who bought are already enjoying capital growth in excess of 30% on their investments. Sales Director Timo of lush tropical landscaped grounds on a rolling hillside overlooking the Indian Ocean. The homes are set around an established 18-hole championship course with a separate 9-hole par 3 course. A second adjacent championship golf course is planned. There are no less than 22 villa designs to choose from with 2, 3 and 4 bedrooms, nearly all of which have uninterrupted panoramic golf and ocean views. A wide range of options and interior design packages is available. Villa owners automatically become members of the Golf du Chateau club as well as of the residents’ Sports & Racquets centre and the Beach Club. Villas Valriche is part of the Mauritian Government’s Integrated Resorts Scheme, which provides automatic residency to overseas freehold property owners and their dependants, as well as substantial fiscal benefits such as low income tax and no capital gains or inheritance taxes. The Island benefits from political and economic stability, an ideal climate, beautiful beaches and stunning scenery. A world-leading luxury holiday destination, hotel occupancy rates are between 70 and 80% all year round, so buyers can feel confident about the ability to attract a good rental income from their investment. Prices start from US$950,000 for a detached freehold villa with infinity pool and private landscaped garden. March/April 2009 ? EXPAT INVESTOR 23
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