Property investors take the long haul

Investment property news: IN2PERSPECTIVE

The European market offers annual yields of around 5-10%, but for those who don’t mind travelling further afield, investing in long haul destinations outside Europe can bring even higher rewards.

Exhibitors at The Property Investor Show (23-25 September, ExCeL London) will be selling property in exotic locations such as the Caribbean and Brazil as well as the more traditional markets of Spain and Florida.

Brazil

The fifth largest country in the world, Brazil covers almost half of South America and with vast natural resources and a large labour pool it is South America’s leading economic power. The annual economic growth rate is around 7% and tourism has increased by 30% in the last year, giving a realistic guarantee of future market stability and providing security for developers and investors who are rightfully wary of volatile markets. House prices are a fraction of the cost of the UK and the cost of living can be as little as 20% of the UK.

Caribbean

The Caribbean islands continue to attract visitors and residents from around the world because of the idyllic climate, warm waters, deserted beaches and relaxed lifestyle. In the Dominican Republic land ownership restrictions have been eliminated and there is no property tax, which has fuelled inward investment from foreigners. The Caribbean boasts booming tourism and therefore huge interest in property from both foreign and local investors. The property market has rocketed by over 20% in the past year and land is selling incredibly fast.

Thailand

Despite the Asian tsunami having hit a large part of Thailand, the property market has not been badly affected. The market has remained steadfast and buyers from all over the world continue to be lured by what Thailand has to offer. As property prices in the Mediterranean become more expensive, Thailand provides an alternative at a fraction of the cost. The cost of living is around a third of the UK, attracting retirees in particular who are drawn by the tropical lifestyle, affordable property and cheap medical services. A sea view property can yield up to 8% and properties built around a golf course yield between 4 and 5%, with the east coast being approximately 25% cheaper than the west coast.

Shanghai

Shanghai is booming in trade, finance and property and by 2020, plans to rival and overshadow places such as New York, Tokyo and London. The economy has grown by over 9% GDP per annum over the last 10 years, it joined the World Trade Organisation in 2001, the currency is still said to be undervalued and the Olympics will be held in China in 2008 - all strong indicators that the boom will continue. In 2002 property prices grew by 19.5%, in 2003 by 24% and in 2004 by 27.5%.

Nick Clark, MD of Homebuyer Events, comments: “Canny investors are looking further afield when choosing a destination for their investment property, as infrastructure and transport links continue to improve in countries that were not previously considered as viable options. High economic growth and future rental potential are key factors in these markets, attracting investment and tourism.

"European markets are still incredibly popular, but those who are keen on taking a bit more of a risk are snapping up properties in exotic locations which promise even higher yields and capital growth.”

- 08 September 2005