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News: Property speculators tempted by higher risk hotspots

HIFX, the currency specialist, released its monthly Global Property Hot Spots Report into trends among Brits buying property abroad this week.  This month the figures show that British speculators and the more adventurous investors continue to be attracted by the emerging markets within the former Eastern Bloc countries...

HIFX, who buy currency for 12% of Brits buying abroad (25,000 clients annually) have discovered that whilst France and Spain continue to attract the majority of British ‘holiday-homers’ (55% of all enquiries), British and Irish investors are increasingly turning to cities further afield to snap up ‘bargain’ property at per-square metre prices which are considerably less than other more popular European destinations. 

Despite a decade long economic downturn in Germany, following the country’s successful hosting of the World Cup, in which Berlin as the final venue played an integral role, the city is now proving very popular with British property speculators, HiFX report.  Areas that are on the investors’ current hit list include the prime central district of Schonëberg, the old money area of Charlottenburg, and Friedrichshain, a traditionally working-class area of former East Berlin that is rapidly gaining in status as a hip and trendy district. 

Romania capturing the attention of British speculators

Looking further east again, since being given the green light to join the EU (albeit under strict conditions) Romania has been eager to shed its label as one of the poorest nations in Europe and subsequently is also looking to get in on the property investment action. 

Mark Bodega, Marketing Director of currency specialists HiFX commented, “The property market in certain areas like the capital Bucharest has been growing at the bullish rate of an estimated 25 percent per annum for three years now, fuelled by speculators waiting for healthy capital returns once the country becomes a free market and receives an estimated €11 billion in EU funding.”

Bodega continued, “Less experienced buyers need to be aware that this is still a speculator driven market. Until the county amends its property-buying laws, foreign nationals cannot hold freehold properties.  It’s also not yet possible to purchase there with a UK or Romanian mortgage and so most buyers are cash buyers targeting apartments in Bucharest – which start at around £50,000 – or the budding ski resorts such as Brasov.”

Warsaw and Krakow continue to attract the buy-to-let investors

Again it is the more adventurous investors that seem to be driving demand in the Polish capital Warsaw, along with Krakow, the country’s second largest city and cultural capital.  Home to Poland’s oldest university, the Jagiellonian, nearly 200,000 students study in the city.  This makes for great reading for buy-to-let landlords, many of whom have also been drawn to the city by the opening of routes in by no frills airlines. 

Bodega continued, “Several multi-national companies including IBM, Phillip Morris, BP and Motorola have been drawn to the region by subsidies and attractive rental terms to set up operations in large free-enterprise zones on the outskirts of the city.  To cater for the expanding workforce, new apartment blocks are being built at high speed.”

Bodega concluded, “While the opening of new markets by investors is exciting, buyers should bear in mind that Poland and Krakow in particular, are unlikely to catch on in a big way as second-home destinations, and with many new developments, supply could affect future resale values.  However, for quick-off-the mark investors who do careful research there is a real opportunity to reap strong returns in the medium term.”

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