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Overseas property trends for 2012 - 23 December 2011

Five overseas property trends for 2012

There is little doubt that 2011 has been a testing year for the overseas property market. Without doubt there have been some incredible bargains to be found in locations across the globe, but the progress that could have been made in many areas has been halted by a severe lack of economic confidence or an inability of banks to lend on property in certain countries.

It hasn’t all been doom and gloom, and there has been some very positive news coming both from countries which have managed to escape the worst of the economic downturn, plus also from some of the areas which have been most severely affected by the global downturn.

As we move into 2012, here are five things to look out for in the overseas property world:

Eco resorts
Despite suffering one or two false starts in the past, eco resorts are set to grow in importance through 2012. There are a number of reasons for this, from growing environmental awareness among the buying public and an increasing acceptance of eco resorts among property developers. Perhaps the most important factor though is that many governments are no longer prepared to allow rich property developers free reign to build in some of the most desirable locations on the planet. In order to secure land in coastal locations, many governments will require that new developments have minimal impact on the local environment. In addition, these same areas are set to impose stricter limits on the volume of property being built; meaning that demand for such properties will increase.

Example: Emerald Knight is currently offering investment packages in a brand new eco resort on the Caribbean island of Grenada with a return on investment of 80 per cent after 24 months

Brazil
Having been the darling of the overseas property world for the past couple of years, many people wondered whether Brazil would be able to continue its rapid development in the face of the near chaos enveloping the worldwide economy. While there has doubtless been some effect from the turmoil in the rest of the world, Brazil has fared very well in 2011 in comparison to other countries in the region. The establishment of a stable new government in the wake of President Lula da Silva stepping down earlier in the year has aided the continued development of the economy and the tourist market, while more developments have completed, reassuring potential investors that Brazil is more than a flash in the pan. Economic development has been so successful that many Brazilians are beginning to look overseas for their own holiday homes, a sure sign that the economy is continuing to be successful.

Example: Landcorp is offering individuals the chance to invest in a land development opportunity at a stage which is usually reserved for large institutions. The land has been approved for urban expansion and investments can be made from £20,000 with fixed returns of up to 191%

New Zealand
Another country which has weathered the economic storms very well and has come out the other side in a strong position in the region. Despite the natural disasters which have befallen New Zealand in 2011, the country remains in a very positive mood, indicated by the fact that the incumbent government was recently re-elected with a huge majority. Add to this the fact that New Zealand is still in the top three emigration destinations for British people looking to move overseas permanently, and there are great opportunities for property investment here.

Example: The Ascot Mews development in central Auckland has a projected return on investment in excess of 35 per cent, and offers a seven per cent yield which is paid to investors ahead of the payment of management fees.

Lifestyle property
This year should see the continuation and extension of what has happened in 2011, namely the increased prominence of lifestyle properties over investment opportunities for a certain portion of the buying public. Those who are able to release equity or get finance are often looking for properties to use primarily for their own purposes. Therefore, many ‘investment opportunities’ which are advertised in traditional locations will lean heavily to the lifestyle element, while other developments will advertise almost wholly on the lifestyle gains buyers can expect.

Examples: Buyers at Dubrovnik Sun Gardens can expect a substantial amount of personal use thrown into the investment deal, while Landcorp’s Canada opportunity allows buyers to experience the outdoors family lifestyle alongside investor advantages.

Florida
The USA’s Sunshine State has been one of the worst hit areas worldwide in the global recession. Property prices in some parts of the state are anecdotally up to 65 per cent below their peak levels, and on the domestic front there is little indication of an upturn. However, there is recent evidence that prices are beginning to turn a corner, thanks mostly to buyers coming from Canada and Brazil – two countries whose residents have fared rather better through the global economic downturn and who are now looking to invest overseas.

Example: Feltrim has a selection of completed properties in Florida offering yields of up to 12 per cent and at up to 50 per cent below peak prices. Some of these properties are available for as little as £43,500 and are up to 30 per cent cheaper than their build cost!

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