Cuba's decision to allow 99 year leases will be an excellent indication into the current state of the overseas property market. In fact it will be one of the only true indications we ever get.
This is because the market is a truly strange place. Overseas property news and reports have always been dominated by people and companies with vested interests, and now is no different. But it is now harder to decide what is true and what isn't, as reports of increasing sales and searches conflict with things like austerity blues.
Why Cuba's decision will be an indication of how the market conditions is because analysts are expecting a wave of new condominium, golf and marina developments, like we saw in dozens of emerging markets during the boom.
According to sources in the Cuban government 16 condo developments have already been approved by the council of ministers and are proceeding to implementation, and another 4 marina only condo developments are in the pipeline. Many developers have been waiting for the chance to enter the Cuban market for year, so that is not the insightful part.
What will give us an insight into the current state of overseas property investment is sales and demand for the resorts. We know that agents and developers in the Caribbean have seen strong sales to wealthy lifestyle buyers since last year, and that sales of property in emerging markets like Turkey and Egypt have also reportedly grown.
But we don't hear much of the far flung markets like Panama, Phuket, Koh Samui etc. A reported new development on Koh Samui last year gave cause for hope, but there has been little since. Because the Cuba law is hot news, it can be expected that we will hear if demand is particularly strong or otherwise. Thus giving us an indication to where overseas property investor confidence is currently at.
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