Emerging Market Picks Part I: Latin America

After almost 2 whole years in the doldrums, emerging market property investment is picking up in support once again, thanks in no small part to the massive acclaim of Brazil, which has grown into one of the world's highest profile markets.

Thus, we have decided to conduct our first review of which emerging markets around the world, starting with Latin America. No, it's not just to get another tuppence worth in on Brazil, but because Latin America is very much becoming a centre for emerging market growth, with many hot markets and we wanted to lay out what markets we feel are offering the biggest potential for growth.

Brazil

We would love so much to have been different, to have been able to be controversial in saying Brazil wasn't one of the hottest emerging markets in Brazil, or the world, but we just can't do it. Brazil has so many strong sectors, as do many Latin American economies, but then Brazil has also discovered oil.

Brazilian agriculture is in the top 5 in the world, in terms of volume of production and head of cattle. Then you have the booming services sector, fuelled by leaps in budget aviation and technical and administrative outsourcing over recent years. Then you have the discovery of oil, which will add millions of dollars in revenues as it is tapped and exploited.

All this is fuelling phenomenal economic growth, which is increasing employment and affluence within the Brazilian population. As such the demand for affordable housing to buy and rent is growing massively. The north east, and especially cities like Natal and Sao Paulo have been found to be leading this growth in terms of percentages.

Availability can be a problem for foreigners, but we have just brought on the Edifício Dr. Geraldo Furtado development in Natal. The development is specifically targeted at the local market, which means low prices to foreign investors.

Panama

You don't hear much about Panama these days but that doesn't mean it lost all the growth potential it had in 2006, 07 and 08. While many markets crumbled at the hands of the crunch, and developments were postponed and cancelled, the construction boom in Panama continued, as the economy has continued to grow by around 5% per annum.

The economy is forecast by both the World Bank and International Monetary Fund to grow by over 4.5% this year (4.5% and 5% respectively).

Then there is the expansion of the Panama Canal. 5% of global shipping cargo passes through the canal, but it has grown outdated and too small for the larger super-freighters that now rule the seas. The multi-billion dollar expansion will add to Panama's economic growth.

Panama property is not the cheapest in the world, but it is very competitive. We have a development of luxury apartments in a resort on the Caribbean coast at prices starting from £55,000.

Panamanian's Scoff at the Effects of Credit Crunch - Now is the Time to Buy Property in Panama

South American property portal Encuerta25 has revealed the findings of its survey into the Panama property market. According to its report some 65% of respondents think the international financial downturn has had little effect on Panama, and a further 12% think it has had no effect.

I was surprised to find out that only 6% of all people currently buying property in Panama come from Europe, the rest come from the Americas, which isn't a surprise.

Panama became a massively popular destination with overseas property investors, which added to the massive market it had in American retirees buying property in the country -- more than anywhere else in the world.

Panama's impressive economic growth coupled with low property prices, high rental yields (18% not unheard of) and a favourable tax regime are among the reasons for its popularity with overseas property investors.

Now is most definitely the time to buy property in Panama, well actually 2 years ago was the time, but this is all we can do without a time machine. Make no mistake, between now and the completion of the Canal expansion in 2014, property prices in Panama will increase by at least 50%, and possibly even double.

View Panama property for sale

Panama Economic Activity in June Up on Last Year

Economic activity in Panama was 0.31% higher in June 2009 than it was in June last year, prompting optimism from the government that it could mark the beginning of an overall return to growth in one of Latin America's best performing economies.

After two consecutive months of falling economic activity the June rise brought the decline in Panama's economy down to 0.5% for the first half of this year. This is compared to an 8.44% growth in Panama's economy in the same period of last year.

However, the fact that Panama's economy was so strong in the first half of last year, makes the 0.31% June increase on last year's performance even more poignant.

Panama has average 8% GDP growth in the last few years, and even now, during one of the worst global recessions the world has ever seen, the median forecast for Panama is a 3% growth in GDP for 2009.

I agree that a 3% growth is entirely possible, with potentially even a 4.5% growth over the fiscal year. If this is indeed the turning point in the Panamanian economy then I believe we will be looking at a v-shaped recession/recovery track, with a strong return to growth and a return to similar levels of growth seen in previous years in the 2010/11 fiscal year.

I believe this because Panama is currently like a magnet for investment because of the expansion of one of the most important waterways in the southern hemisphere, the Panama Canal, which cuts Central America in two to link the Pacific Ocean to the Caribbean Sea and Atlantic oceans.

The expansion, due to be completed in 2014 will triple the Canal's expansion and has the potential to increase Panama's GDP by at least 25% in subsequent years. This is making it a hotspot for overseas property investment, with property values also forecast to grow massively.

View property for sale in Panama

Canada Signs Free Trade Deal With Panama

Canada has signed a free trade deal with Panama, which will immediately slash tariffs on exports between the two countries by up to 90%.

The deal will be mutually beneficial, because, though Canada exports far more than it imports from Panama and vice-versa, both will be able to import goods cheaper, because prices will not have to factor in the tariffs.

Panama's imports from Canada, and many other places around the world are vital to its economic emergence.

Panama's economy grew by over 9% last year, and is expected to grow by over 3% this year according to the International Monetary Fund. Therefore this is a savvy move by Canada, as Panama's imports are likely to drop by a lesser margin than that of recession-hit countries.

The US proposed a similar deal with Panama last year, but it has been stalled and now looks likely to be shelved in favour of new policies by the Obama administration.

In 2008 Canada's top goods exports to Panama were:

• Vehicles, including diesel
• Electrical and electronic equipment
• Aerospace (primarily flight simulators)
• Pharmaceuticals
• Pulses (primarily lentils)
• Frozen potato products

The top exports to Canada from Panama were:

• Mineral fuels and oils
• Fruits and nuts
• Fish and seafood products
• Spices
• Coffee
• Mineral ores (primarily silver ores and concentrates)

In 2008, Canada exported six times the amount of goods that it imported from Panama.

Panama's incredible economic present and future continue to make it increasingly popular with overseas property buyers and investors. View Panama property for sale

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.