Brazil Property Attracts Increasing Investment

If you’ve been keeping up with Brazil the past year or so then you’ll already know that with a booming and growing economy, the property market has been the source of great interest in overseas property investors.

Recently, it has been reported that Brazil’s government is ensuring that the growth of the economy will remain stable by taking steps to keep it sustainable. It has also been reported that the government is planning on $30 billion in cuts, which will result in a reduction in defense spending as well as the hiring of civil servants coming to a halt.

With Brazil’s exploding and excessive growth, cuts are necessary to keep the country at a sustainable level. Guido Mantego, Brazil’s Finance minister, stated that the cuts are aimed at slowing down the growth but not too much as to stop the growth completely.

Brazil’s economy grew by 7.5 percent in 2010 and inflation is rising. The country has been very popular globally, with property investors taking notice and investing in the country hoping to increase the value of their investment portfolios significantly.

Experts anticipate that the expanding economy and property market will continue to be favorable for the next five to ten years. Additionally, the Property Price Index will soon be out, which will compare different types of properties in Brazil, such as residential and commercial. Experts believe that this index will be key to monitoring the market and help avoid bubbles and property crashes in the future.

Berlin Property Prices Lowest in Industrialised World

Berlin property prices are lower than in any capital city in the industrialised world, according to a new comparative study by Engels & Volkers, although it is not the first time this has been reported, and it will probably not be the last either.

In Mitte, the upmarket district of Berlin, top end apartments currently go for an average price of 3,500 Euros per square meter, which is a fraction of the price of a comparable unit in the financial district of New York.

Engel and Volkers declared Berlin's history of division as responsible for its failure to grow like other capital cities.

"We have only begun to see things changing here in the last ten years. But, compared with other major cities, the impact of this on the property market is rather minimal," said Anne Riney, managing partner of Engels & Volkers in Berlin-Mitte.

"It will take a long time yet before the market reaches anything like the price margins of London, Tokyo, New York or Paris. Until then, Berlin will remain the world capital with the lowest-priced residential property," she added.

It is true; history is a huge part of the reason why Berlin property prices are so low, but not in the way laid out by Engels and Volkers.

Only 40% of Germans own their own homes, much lower than the developed world average of around 70%. The status quo has developed over the years, and the renters culture is now deeply entrenched in Berlin.

Because of the situation, the government imposes controls on rental rates, allowing rents to rise only when wages rise. Because the biggest buyers of property in Berlin are buy to let investors, price rises are governed by rental rates. This vicious cycle has kept the lid on Berlin property prices for years.

German Property Perfect for Today’s Breed of Investor – to benefit from Crunch

German property investment has totalled 1.9 billion Euros so far this year according to a new report by Savills. The investment consultancy says that the money spent so far has been mostly by German Real Estate Investment Trusts, but that it expects the return of foreigners in 2010.

German property could do very well in the coming years, and if it does then it will have the credit crunch to thank.

Before the credit crunch, German property was constantly losing out to the emerging markets, and even to its neighbouring established markets, when it came to overseas property investment, because investors will primarily looking for exceptional capital gain.

Now that people have seen in no uncertain terms how quickly any capital gain can be lost, today's property investor is primarily looking for solid rental performance in their property of choice. For that type of investor Germany is perfect.

In Germany only 42% of the population owns their own home, and 44% rent at the market rate (according to recent figures from Eurostat).

This means that the government has to restrict rental rates, and landlords are only allowed to raise rents if the economy is growing. That is where the downside ends. In Germany tenants are very loyal, and when one tenant leaves it is relatively easy to find another. Typical yields are around the 4% mark, or around 6% in some areas.

Another reason why German property is perfect for today's investor is the abundant availability of properties with tenants already in place. Today's investor is researching their acquisitions to within an inch of their lives. Having the tenant in place with a rent figure set allows the potential investor to have exact figures on which to calculate the cash-flow from their German investment property.

It is also worth mentioning the fact that there are very few -- if any -- off plan property in Germany. Especially in Berlin it is almost all resale apartments in buildings built 40-100 years ago. This is also highly suited to today's risk averse property investor.

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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.