German Business Index Shows Worse May Be Over - Keen Interest from Property Investors

There are hopes that the German economy maybe past the worst of the recession after a major index of business confidence rose for the fourth consecutive month and to its highest level since November 2008.

The Ifo index polled 7,000 German firms on the business climate, the current economic situation and business expectations (future). The business climate index rose from 85.9points in June, to 87.3 points in July, the current expectations index rose to 84.3points from 82.4 in June, and the business expectations index from 89.5 to 90.4.

The Germany property market, certainly from an overseas property investment standpoint is very much based on the strength of its economy, with most investors buying properties with a view to the strong residential rental market in places like Berlin -- because of the predominance of German's renting their homes as oppose to buying.

Thus, the investors of yesterday and tomorrow will be keenly watching for any further signs that Europe's largest economy is starting to get back onto its feet.

There are those that believe the economic crisis may forever change the property market, with people taking advantage of any price-falls to buy their house and escape the rental market, but I myself feel this is unlikely -- in Berlin especially renting is a way-of-life.

Economic Growth Potential Makes Panama a Hot Property Investment

I have just read an excellent article on Panama property investment, written by Liam Bailey for the Overseas Property World blog on Wordpress.

It explained the massive boost the Panama economy is going to receive even before the Panama Canal expansion is completed in 2014.

The Panama Canal is one of the biggest contributors to Panama's GDP, and it is a well known fact that the completion of its expansion will be a massive boost to Panama's economic growth, which had average 10% in the few years preceding 2008.

Bailey also pointed out that the Canal Expansion is already proving to be a boost to Panama's GDP, because in advance of the massive boost its completion will be, Panama has become a hot investment tip, for property and all sorts of other investments. In fact, this is the reason why Panama's economy is continuing to grow (3% this year and 4% next according to International Monetary Fund forecasts) throughout the global economic crisis according to Bailey.

But Panama's economy is to receive a massive boost before the expansion is completed. Bailey believes that when global economies, including the US begin to recover, use of the Canal and neighbouring Colon Free Trade Zone will increase GDP growth, as will tourism and exports, which Bailey believes will also start to grow post-crunch.

Increased imports into America as the economy recovers will benefit many South American markets as well as many more around the world, including Italy.

Bailey forgot to mention the fact that property prices are still comparatively low in Panama, increasing the potential of it as an investment.

Cypriot Economy Looks Promising - Makes Property more Attractive

Cyprus is the only Eurozone country expected to avoid the recession, having shown continued economic growth in Q1 and expected to do so throughout this year and next, according to the July Monthly economic and employment monitor by the European Commission Department for Employment, Social Affairs and Equal Opportunities.

According to the report, Cyprus’ GDP has remained relatively stable over the last few months, and growth has continued in the first quarter of 2009, from the 3.7% growth recorded in 2008, making it the only Eurozone country to avoid recession.

The report also said that the commission expects the Cypriot economy to grow by 0.3% this year, and 0.7% next year, which is much slower than previous years but impressive against the back-drop of developed economies like Italy struggling to find growth again next year. However, the EC predictions are moderate given that the Cypriot Finance Ministry has recorded a 1% growth this year already, and the IMF forecasts 2.1% growth for Cyprus in 2010.

"This relatively positive economic outlook is tempered by the substantial decline in tourist activities on the island. Over the five first months of 2009, the tourism sector's income, which accounts for 15 per cent of Cyprus’ GDP, dropped by 11.7 per cent in comparison to the same period a year earlier, and by 17.6 per cent in May alone. The authorities fear a massive 20 per cent drop in arrivals during the holiday high season, which would have dramatic consequences on the island’s seasonal employment,” the report said.

However, the report also stated that despite unemployment in Cyprus having risen continually since September to hit 5.3% in May, that Cyprus still has "one of the lowest [unemployment rates] recorded in the EU".

Cyprus property remains popular with overseas lifestyle buyers and investors, and news like this can only increase its popularity.

Bulgaria Property to Attract New Wave of Overseas Investors

The credit crunch could prove be the best thing that ever happened to the Bulgaria property market, experts have stated.

The international economic downturn has given the Bulgaria property market the chance to reinvent itself and attract a new wave of overseas investor, according to overseas property specialists Azure Overseas, director Frank Crowley said:

"Bulgaria property became hot news with overseas investors between its transition and entry into the EU in 2002/04 and 2006/07, who bought property there on the strength of its potential for short-term gains. The trouble with this was that everyone started selling at the same time, and the market became saturated with similar properties in pockets around the popular areas.

"Now, during the global recession, practically every market that was popular with overseas investors has faced a similar fate as foreigners try to liquidate their assets as quickly as possible. The playing field has been levelled if you like, and Bulgaria has a chance to put forward its strengths of low cost property, great beaches, great ski-slopes and fantastic potential for capital growth over the mid-long term."

Overseas Property Investment: Nothing Has Changed - Really

No one can deny that overseas property investment has been badly damaged by the dreaded credit crunch. From 2004 onwards overseas property investment was a massive growth sector, with emerging market property investment seeing the fastest growth in popularity.

The properties that were available to overseas investors in emerging markets, tended to be off plan properties, which carried the highest risk. Because the potential profits were so great, people were blinded to the risk and poorly advised by shady agents got their fingers burnt.

This has badly damaged the public's confidence in overseas property investment. But what they were saying was true; off plan property in emerging markets is potentially one of the most lucrative of all property investments, and accessible to a wider range of people because of the low prices, you just have to be careful and do your own research.

I would never advise people to pay any more than the initial deposit without making at least one trip to the country to meet with the developer and see the development work. I would also be looking to find out about the developer's background; how many developments have they successfully completed, are they financially sound etc.

This is to make sure that the financing to complete the development is secured before off plan units are being sold and work commences. If the proceeds from off plan sales are being used to fund any portion of the work don't touch it.

When you do your own research you are minimising the risk and increasing the potential reward. Though the downturn has scuppered property price growth for this year and possibly next year as well, the growth people were being promised by decent agents will still be realised in most cases, when the recovery is underway.

If you choose carefully and do your research, the potential gain on an off plan property investment in an emerging market is 100% in the first five years, and 200% in 7-10 years.