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News: Overseas investors full of confidence

Mon, 07 Jan 08

International property investors remain confident despite tough times in 2007...

It seems that for UK buyers, our love for overseas property remains strong, according to experts at the NAEA International incorporating FOPDAC. While the outlook varies as one drills down into the established and emerging markets, it seems that the diversity of the UK buyer is one factor helping to keep overseas property demand strong in 2008.

Robin Haynes of Foreign Currency Direct is particularly optimistic following a pick up in enquiries at the end of last year. “We’re experiencing a good level of interest at the moment. Overall we saw an 8.2% increase in the number of overseas property transactions in the fourth quarter of 2007 compared with 2006.”

Buyer diversity keeps established markets strong

The world’s established property markets have maintained a consistent level of interest over the last 12 months and, despite speculation to the contrary, many are expected to continue being popular. Countries such as France, Portugal, Italy and Cyprus will do particularly well in 2008 according to Vanessa Bird, of financial services company Baydonhill:

“There has been considerable nervousness over the economy recently, but we believe that the majority of the established markets will remain robust over the next 12 months.

The key is the diverse selection of buyers who look to purchase in these destinations, from second home owners to those relocating for retirement. The huge variety present here –in terms of age, financial circumstances and motivation for buying – is the driver behind the constant supply of purchasers.”

Spain and Florida still hold appeal

While Spain and Florida are reported to have experienced overheating recently, they still hold great appeal for traditional overseas buyers according to Robin Haynes: “With all its bad press we know that Spanish property is taking longer to sell than normal, but British buyers are still in love with the idea of a place on the Costas. Spain remains the number one destination according to enquiries through our portal PropertyLine.co.uk. Indeed, we sent more payments to Spain in 2007 than in 2006.

“Meanwhile, with property prices having fallen in the USA and the Dollar at its lowest level against the Pound since the 1980s interest is escalating again in the Florida market.”

Falling broadly into two groups, the emerging property markets revolve around the up coming areas of Central and Eastern Europe and more exotic locations such as Brazil, Venezuela and Thailand. With investment being a key focus for the latter group, Vanessa Bird believes that now is a telling time for the future success of the markets in Central and Eastern Europe. “The challenge for these markets is to go beyond the 2-3 year popularity span which so many are experiencing.

Bulgarian confidence

Bulgaria is a good example of this. It has got to the stage where many of the properties are now being completed and investors are finding out whether they will actually see the rental returns that were promised at the beginning. If returns are achieved then this will bolster confidence in other emerging European markets.

“There are certain destinations across Central and Eastern Europe where the markets are still in their infancy and are likely to serve investors well over the coming year. Romania and Latvia are just two examples of these.”

Meanwhile, more exotic locations are expected to grow in popularity as buyers become even more adventurous.

Linda Travella, committee member at the NAEA International incorporating FOPDAC, comments: “Wherever you are looking to buy, the important thing is to seek the advice of a reputable and knowledgeable agent. There can be many complicated buying, tax and legal issues to contend with, particularly in less established destinations. Meanwhile, some of the horror stories you hear in the press are the result of property purchases that have not been monitored by an experienced professional, so visit naea.co.uk to find out more about choosing the right professional.”

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