Investors Dominant in US Market – Little Wonder

Foreign investors are so heavily active in the US property market right now that, along with their US counterparts they are preventing first time and low income buyers from benefiting from the massively reduced prices on offer on repossessed and distressed sales.

Who can blame them though?

2 million homes were repossessed in 2008, 2.8million were repossessed in 2009, and a higher figure is predicted for this year. Not only does this mean 4.8 million homes being sold dirt cheap -- add on well over a million for this year already --, but it also means a high proportion of 4.8 (to 6+) million people moving back into the renting circle.

The downsides are: A: we need first time buyers and occupant buyers for a healthy market, and B: with such a high proportion of houses being bought by investors there is the potential for a severe jolt if they all (or too many of them) try to sell at once.

Luckily, we know that most investors today -- not only in America -- are investing for rental income, with capital appreciation being considered a bonus.

But this may only severely delay the problem. There is still the potential that years down the line, when the market has really strengthened, droves of them will sell up to recapitalise their business of for whatever reason and kick the market, or at least some local markets in the teeth for a bit. But anyway we are getting ahead of ourselves.

For now, all we need to say is that there are millions of great deals out there. And while it is sad that people are losing their homes, it is them, the economy and irresponsible lending (the banks) that are to blame, so there is no point in investors cutting off their nose not to capitalize on it.

Cuba 99 Year Lease Law to Indicate Overseas Investor Sentiment

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.

Overseas Property: Has Private Investment Really Been Killed?

This week, overseas property portal Primelocation ran a report on how 91% of all property searches were for property in France, Spain, Italy and the US. But we know from recent reports that the world’s investors are focussing heavily on places like Turkey and Egypt, which are growing strongly at the moment. Surely pure property investment hasn’t been killed on the private level, has it?

It seems to have been according to portal searches. Rightmove Overseas’ results also showed no sign of Turkey or Egypt recently.

Thank fully we know that it hasn’t been. We know that buyers are still heavily interested in Turkish and Hurghada property because we talk to them everyday.

So where is the deficit? Well, the keyword is buyers. Most of us heard about the recent battle of the apps as both Rightmove and Primelocation brought out Apps for the much reveered Ipad at around the same time (Rightmove won by the way). These of course followed Iphone apps by not only Rightmove and Primelocation but all the other major portals as well.

These apps, and technological advances like it have not only made it easier to search for overseas property, but they have made it fun. Unfortunately this has increased the number of people searching for overseas property who have no serious intention of buying anytime soon.

Anyone who has ever dreamed of buying an overseas property (and let’s face it, who hasn’t?) in the sun is now searching for their dream home on the miserable commute home from work. Whereas before people would have played mini-games to escape the akward silence of the train, now they are playing with their apps.

This is great for the portals, but not such great news for the agents receiving their enquiries. So, while the portal search enquiries are an indication of the lasting popularity of the traditional destinations with those seeking a lifestyle buy, they do not neccesarily indicate an end to pure investment on the private level.

Any Briton on a low budget looking for an investment or holiday home investment they can afford now, and easily and affordably get to, is buying in Egypt or Turkey, and that will be the case for the foreseeable future.

Turkish Property and Tourism to Benefit from Economic Realities

Property in Turkey could see increased foreign demand as Europe continues to struggle with the recession and sovereign debt crisis, according to one overseas property commentator.

“We are all feeling the pinch as we struggle into a ‘rocky recovery’,” said Liam Bailey, director of Write About Property, explaining:

“In fact many people are feeling worse now than they did during the recession, because we all thought the worst was past, now inflation is rising faster than growth, and we are full of dread at the impending austerity measures.

“For the next few years, because people always want holidays abroad, we will see continued rises in tourism to low-cost destinations like Turkey, and this will also bring increases in demand for holiday homes and holiday home investments in the country, also fuelled by the country’s low prices.”

Bailey went on to say that Turkey would also benefit from Greece being practically a no-tourist zone.

“Greece has always been one of Turkey’s biggest competitors for tourism. Now, with the British Consulate and others warning of disruptions because of the industrial actions, and terrorist groups threatening to target the tourism industry, many people will give Turkey a wide berth, and many of them will choose Turkey instead.”

For the property market, Bailey also said that Turkey would benefit from being in a better state fiscally than its rivals.

“People are more cautious than ever when it comes to buying overseas property. When you look at Greece, Spain and Portugal being downgraded by investment ratings agencies, and Turkey looking likely to be upgraded, you do the math,” he said.

Why is Turkey Property Such Hot News Right Now?

Turkey's profile as an international destination of choice for tourists, holiday home buyers and even holiday property investors (fly-to-letters). It used to be that one of the main reasons to recommend buying property in Turkey was because EU membership was on the horizon, but since then Turkey has become a strong and powerful package all on its own, and property there is predicted and capable of growing and earning strong rental yields with or without EU membership.

We haven't really published a guide like this since things changed so drastically, and we thought that now would be a good time to do so. But why is Turkey so hot?

Economy Growing Faster than Rest of Europe

According to Turkstat data Turkish GDP grew 11.7% in the first quarter of this year compared to the same quarter of last year. This follows a growth of 6% in the final quarter of last year. Comparing this to Spain which contracted –1.3% and –3.1% respectively, the UK which shrank  –0.2% and  -3.1% respectively, Germany which grew 1.5% in Q1 following a –-2.2% contraction in Q4, France which grew 1.2% following a 0.5% contraction, and Italy which grew 0.5% following a 2.8% contraction, you can see why the Turkish economy is becoming such hot news.

A strong economy means a strong currency, healthy inflation (if carefully managed) and therefore growing property prices.

Strong Tourism Growth

The latest data on tourism from the tourism ministry shows that Turkish tourism grew 9.6% in the first half of this year, compared to the first half of last year. While the British travel industry is reporting a struggle, the Turkish tourism ministry shows that any drop in British visitors is being more than compensated for by growth in visitor numbers from Russia, Syria, Iran and Bulgaria

Tourism growth is one of the most important factors in the success of the Turkish property market. Again this is because most buyers are buying holiday homes and almost all of them will plan to rent it out for an additional income.

Marinas, Resorts and Success Stories

The volume of positive news relating to the overseas property market in Turkey is about the biggest in the world right now. Each week we hear of a new marina, new investments, new hotels from Hilton, Marriott, and other success stories, with very few if any negative news to temper it. For instance, there have been no reports of developments cancelled, or investors out of pocket, or certainly no more than in any market.

Thus, each week confidence in the Turkish property market grows. In a risk averse world confidence is a main driver of sales, and that is why Turkey's fortunes continue to improve.

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.

Studio Apartments in Hurghada from £8293 - Incredible

Azure Overseas are happy to announce the lowest priced property in Hurghada ever has just been added to the site. We recently raved about the new Tiba Heights 2 development, but the Isida development is closer to the sea, has a bigger pool, bigger gardens and is 10% cheaper.

You can now buy an apartment in Hurghada for just £8,293. Developments like this are the reason why Hurghada property is set to become one of the biggest stories ever seen in overseas property. For the price, Isida is top quality, and with an array of features including:

• Located just five minutes' walk from a public beach
• Good location in the heart of the fast evolving Al Ahyaa area of Hurghada.
• Large swimming pool on site with dedicated childrens' section
• Gardens around the project
• Communal roof terrace with seaviews
• Centralized satellite television, telephone and internet links to all apartments
• High speed internet to all apartments
• Two elevators to all floors
• 24 hour security
• Ten years' builders' guarantee
• Low annual maintenance fee of just LE2500 (GBP280/EUR340)

The only reason why you don’t read more about Hurghada in the press is because of the obstacles that the economy still must overcome, most prominently the massive gap between rich and poor. But at such low prices, and with so much growth potential, for many people it is well worth throwing in, and as a result Hurghada property is currently one of Azure Overseas’ biggest sellers.

Both the World Bank and the International Monetary Fund are forecasting growth of more than 4% in the Egyptian economy this year (4.5% and 5% respectively), and the IMF is forecasting growth of 6.3% next year. Both are known for being bearish on markets, because they decide which will get loans and which won’t.

You tend not to think about it because Hurghada is known for low prices, but a studio apartment for just over 8 grand, in a luxury resort, in a place with a warm climate year round, clean, safe beaches, and tourism from britain alone growing at 20% per year (Association of British Travel Agents), is nothing short of incredible. Little wonder that projected yields are 10% upwards. It is off plan, and so certainly a high risk category investment, but if you do the proper research this risk can be minimised.