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Overseas property - five to beat the Euro - 29 September 2009

As last week saw Sterling hit its lowest point against the Euro for five months, stories began to emerge of tourists stockpiling the Eurozone currency for future use when the exchange rates swing back in favour of the Pound. However, currency exchange fluctuations are notoriously difficult to predict, and with the Euro now backed by the strength of at least two of its major economies coming out of recession, the exchange rate turnaround may be slower than some predict.

In this there will be overseas property investors looking to make the most of the strength of Sterling in parts of Europe which have not yet adopted the single European currency. Here are five possibly non-Euro property destinations and what they have to offer.

Croatia – The Croatian property market was one of the first ‘emerging markets’ to be targeted by UKn investors in overseas property, and thanks to careful planning from the government, has managed to the excesses of overbuilding and destruction of the natural beauty that undoubtedly attracts tourists to the region. Property prices never experienced the massive inflation seen in other countries, so there may be less distressed sales, but there are still bargains to be had. And with nearly 2,000km of coastline there is sure to be some space on the beach…

Turkey – Property in Turkey is one of the few places showing genuine signs of recovery. As the domestic property market begins to mature (mortgages were only permitted recently) demand is coming from more than one direction, which is leading to early optimism in the market. As yet to make it to the stage of its long-coveted EU membership, the Turkish Lira is still an advantageous currency for Sterling buyers.

Bulgaria – the darling of the ‘emerging market’ explosion throughout Central and Eastern Europe in recent years, it seemed like everyone was buying a property in Bulgaria at one time or another. This demand has tailed off severely in the face of the unrealistic rental income expectations and delays or cancellations on some projects. However, if Bulgaria is your choice, and you’re not looking to make money from renting your property out to holidaymakers, there will be some absolute bargains on resales of newly-completed projects. Tread carefully, and make sure that you’re getting all of the amenities you think you are, and you could land a property for a very reasonable price.

Czech Republic – The growth of the low-cost flight to Europe meant that property in the Czech Republic became very popular in the past three years. The ‘city of a thousand spires’ had a reputation for attracting stag and hen parties and those in search of the cheapest alcohol they could find, but this seems to have tailed off significantly. What is left is one of the most beautiful cities in Europe, which is popular enough with tourists that its low-cost air routes are unlikely to be cut back.

Hungary – Hungary is know as having two cities in one – Buda and Pest, but it is along the shores of Lake Balaton that most of the property in Hungary has been sold in recent years. Popular with tourists from cities around Hungary as a holiday destination, as well as with overseas travelers, it is the destination of choice in the country. The property market in Hungary is still very depressed, and a lack of credit combined with the country’s recession suggest this is likely to continue at least into 2010. However, a cash buyer you will be able to find significant bargains – and if you choose to buy in Budapest rental yields are still good.

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