Top 10 Overseas character Investments in 2010
The Brazilian character market has got a lot going for it. The country is attracting a lot of inward investment, has one of the world’s fastest growing economies, a rapidly emerging mortgage market, a general shortage of quality homes, and has been chosen to great number the 2014 football World Cup and 2016 Olympic Games. This will rule to the construction of new and improved infrastructures and homes across Brazil.
character investors from around the world are flocking to Brazilian shores with a view to snapping up real estate, in anticipation of future capital growth.
One local expect projects Brazilian character prices could appreciate by up to 200% over the next decade, pushed by the country’s thriving economy, and the pending introduction of mortgages to overseas nationals.
Investment banking firm Goldman Sachs believes that Brazil’s economic growth could outstrip that of the other BRIC (Brazil, Russia, India and China) member nations over the next few years.
Brazil’s economy is widely expected to become the fifth largest in the world by the time the Olympic Games kicks off in 2016, and however Brazil character and land prices nevertheless keep a fraction of those found in more developed nations.
The Brazilian president Luiz Inacio Lula da Silva has already pledged to use up to £11.5bn on building a million new homes in Brazil between now and 2011.
However, possible high character investment rewards are not with out their risks, as crime and corruption nevertheless remains extensive in Brazil.
In stark contrast to the comparatively high risk, high return character of investing in Brazil, the risks associated with investing in French character are far lower.
France has traditionally always been a rather safe haven for character investors. The nation was the first European country to come out of recession in 2009, reflecting the fact that the global credit crunch had much less of an impact, compared to other European counterparts.
France’s strong economy is having a positive impact on its character market, which now appears to be on the road to recovery.
Increasing character and mortgage transactions are boosting residential values, with the latest FNAIM data revealing that the average price of a French character appreciated by 2.8% between April and September 2009.
Although average prices keep down 7.8% year-on-year, the market is generally expected to enhance further, due to France’s prudent attitude to mortgage lending.
Anyone taking out a mortgage in France is generally only permitted to borrow one third of their total gross monthly income. This has ensured that mortgages keep freely obtainable, with 100% loan-to-value home loans obtainable at competitive borrowing rates.
consequently, mortgage lending in France is soaring. French mortgage broker Athena Mortgages reports that there was a 21% rise in mortgage enquiries in Q3 2009 compared with the past quarter.
The buy-to-let and leaseback sectors are reportedly attracting particular interest from investors, due to improved yields across the country.
The capital city of Paris has long been identified as one of the most attractive European cities for investment, and is typically the most popular place to buy a home in France, along with Cannes, Marseille and Nice, which are all located along the southern Mediterranean coast.
The USA character market may be showing tentative signs of improvement, following one of the worst economic and character crashes in living memory, but the downturn has come at a cost to many US homeowners.
Data from RealtyTrac shows that a record high of 938,000 US homes foreclosed in the third quarter of 2009. If this trend continues, foreclosures would reach around 3.5m by the end of 2009, up from around 2.3m similarities last year.
similarities in Nevada had the highest foreclosures rates in Q3, followed by homes in Arizona, California, Florida, Idaho, Utah, Georgia, Michigan, Colorado and Illinois.
Rising unemployment levels – currently at a 26-year high of 9.8% – was cited as the main reason for the increase in foreclosure levels. however, there may be worst to come, as the unemployment rate is not expected to peak until mid-2010.
Unfortunately, one person’s misfortune is another’s gain. With around 7m similarities currently in the foreclosure course of action, compared with 1.3m for the same period in 2005, predatory investors are buying up distressed, abandoned and repossessed homes at bargain-basement prices, as now appears to be the ideal time to fill your boots.
Although the sub-chief mortgage crisis started in the USA, there are growing signs that the character market may now be at or near the bottom of the cyclical downturn. Various indices show that average residential prices started to rise, albeit marginally, during the second quarter of 2009.
Sales in Norway have nosedived over the past year or so, as residential values have cooled.
However, the Norwegian character market downturn, which has not been anywhere near as harsh as in other neighbouring countries, appears to have already bottomed out, and looks ready to rule the Scandinavian character market recovery.
The meaningful to the Norwegian character market is the strength of the country’s economy, which has made it one of the wealthiest in the world, while new housing output has dropped below average, which could fall short of need next year.
Norway is high in both gas and oil and this helps to sustain the country’s economy and ensure that its money also stays strong – both alluring to character investors.
The country’s population is estimated to increase by 23% – approximately one million people – over the next 40 years, which should make sure that long-term residential need is strong.
Another positive is the fact that unemployment is extremely low – approximately 3% – compared to its European counterparts.
Almost half of the Norwegian population resides in the counties of Oslo, Rogaland, Akershus and Hordaland, and so this is where character investors should focus their attentions. character prices in these places keep comparatively cheap compared to wages in Norway.
Many of the high earners currently living in Britain look set to quit the UK in droves ahead of the introduction of a 50% top tax rate in April 2010, and escape to more tax-friendly shores, such as Switzerland.
The Swiss authorities are actively lobbying to attract many of these disillusioned high-net worth individuals, who are being tempted by assurances that they will be allowed to steer clear of European Union regulation and Britain’s Financial sets Authority.
It is estimated that hedge funds managing in the vicinity of £10 billion in assets have already moved to Switzerland in the past year alone. This has increased need for homes to rent and buy.
Due to canton restrictions, it has before been difficult for foreigners to buy character in Switzerland. However, the country has now eased its strict character buying regulations, and opened its doors to more international buyers, partly by the introduction of ‘residence de tourisme’ style investments, which is similar to the ever-popular ‘leaseback’ formula in France.
Switzerland, one of the richest nations in the world, is of course a tax haven.
Anyone who sets up long-lasting residency in Switzerland would be entitled to take advantage of the country’s favourable tax law, including the lump sum taxation, which charges a levy based on people’s lifestyle and spending habits.
Given that one’s taxable income is charged at just five times their annual rent or rental value of their character, and the fact that assets outside Switzerland keep tax-free, should ensure need for Swiss similarities – to rent and buy – remains strong for years to come.
Historically, Swiss character values have typically appreciated in line with inflation. similarities located at the top end of the market, in cantons like Valais and Vaud, have reportedly increased by up to 20% in the past year.
The Australian economic and character market recovery has been swifter than the other leading nations around the world.
It has been claimed that the revival in the country’s character market and economy is as much as 12 months ahead of the other developed countries in the economic cycle.
Unemployment peaked in September 2009, in stark contrast to Britain and the USA, while increasing commodity need from China has forced the Australian Central Bank to raise benchmark interest rates. however this has failed to cool strong residential need, which coupled with a general housing shortage, is forcing character values higher.
The latest Australian Bureau of Statistics house price index shows that the average price of a residential character in Australia appreciated by 4.2% in the third quarter of 2009, which method that in the year to September, residential prices increased 6.2%.
Australia could be set for a residential character price expansion over the next few years, as the country’s economy continues to show genuine signs of recovery.
A recent Australia character report projected that average residential prices in nearly all capital cities would increase by between 11% and 19% by 2012, with the greatest character price rises expected to be recorded in Sydney, Adelaide and Melbourne.
I tipped Malaysia to be the number one place to invest in character in 2009, due to the country’s strong character ownership laws, without of capital gains tax and attractive mortgage rates.
However, residential sales were sluggish during the early half of the year, as the market struggled as a direct consequence of the global credit crunch, while there are some political uncertainties emerging.
But with consumer sentiment improving, the recent positive market recovery, supported by the construction of new residential schemes across the country, should continue in 2010.
While character prices race ahead across much of Asia – in countries like China, Vietnam and Singapore – which has led to heightened fears of unexpected character bubbles, the Malaysian character market has merely stabilised, making it appropriate to more balanced investors.
With an extremely young and well-educated population, long-term need for character in Malaysia looks set to grow.
Domestically, an increasing number of people are moving from the countryside into the larger cities, while internationally Malaysia looks set to cross a demographic landmark of huge social and economic importance.
Malaysia’s population is growing by around 2%, or an additional 500,000 people, every year. The World Bank projects the country’s population will grow yearly by 1% until 2050, which will place further pent-up need on character values.
Malaysia’s character prices are nevertheless lower than they were in 1997, due partly to the Asian financial crisis in the late 1990’s, suggesting very real room for growth.
8. Abu Dhabi
The recent character price falls in the fast growing UAE capital of Abu Dhabi, the richest and largest of all the seven UAE states, have been nowhere near as harsh as in neighbouring Dubai.
The tax-efficient emirate has the largest fossil fuel save in the UAE, is the fourth biggest natural gas producer in the world, has the world’s highest income per capita, is home to almost all of the Arabic Fortune 500 companies, and is currently sitting on over 88 billion barrels of proven oil reserves.
however Abu Dhabi is now actively trying to reduce its reliance on oil, and is diversify its economy into the financial sets and tourism sectors. Billions of pounds have been allocated for infrastructure projects and the development of residential, leisure and cultural schemes across the oil-high emirate. The plans are truly exceptional.
Nevertheless, investors seeking out bargain deals will find some of the best opportunities for distressed character investments in the Gulf vicinity in Abu Dhabi.
The recent slowdown in the character market method that just 45,000 are expected to be completed in the capital in the next four years, augmenting the exiting housing shortage.
The supply of housing stock remains scant, partly because Abu Dhabi is not part of a community master-plan like those pioneered by Emaar and Nakheel in Dubai.
The housing shortfall in the capital is expected to stand at around 15,000 homes next year, which could average that character prices and rents are forced up, while residential need – domestic and international – is expected to increase.
Because Abu Dhabi does not have the same high level of exposure to the global financial crisis, compared with other UAE emirates, mortgages for non-residents – at up to 75% loan-to-value – are freely obtainable again. This is likely to allurement to buy-to-let investors, in addition as those people seeking equity release and to remortgage their similarities in Abu Dhabi.
The relaxed Arabian state of Oman, voted ‘destination of the year 2008’ by Vogue magazine, has long been a popular holidaying destination for people living within the GCC.
With a population of around 2.3m, Oman is being modernised and liberalised culturally and economically by hereditary Sultan, Qaboos Bin Said Al-Said, a forward-thinking leader.
Sultan Qaboos strategy for economic growth – Vision 2020 – aims to diversify Oman’s economic dependency on oil, and focus on other industries, such as character and tourism.
need for character in Oman is chiefly being pushed by the Sultan’s decision to introduce legislation in 2004 – ratified in 2006 – permitting foreigners to buy freehold character and land in designated tourist areas, most notably Muscat. These projects are referred to as Integrated Tourism Complexes (ITC). Furthermore, foreign homeowners can now apply for residency visas.
A number of luxurious developments are being erected across Oman including, The Chedi, Azaiba, Wadi Kabi, The Wave, Barr Al Jissah Residences, Jebel Sifah, Salalah Beach, The Malkai, Muscat Hills, Al Madina A’Zarqa, Jebel Sifah, and Salalah Beach.
The fact that Oman appeals to end-users – not just investors – method that the medium to long-term prospect for Omani character market growth looks good.
10. South Africa
South African character market conditions look mature for investment, as the country starts to come out of recession. Recent character price falls appear to be bottoming out, while FIFA’s 2010 football World Cup fast approaches.
From the moment world football’s governing body, FIFA, awarded South Africa the rights to great number the World Cup in 2010, shrewd character investors from around the globe have been looking on with great interest, with one eye firmly on cashing in on the sport’s popularity.
The first ever FIFA World Cup to be hosted on African soil has the possible to be the biggest sporting event of all time.
The tournament is expected to attract around 350,000 football fans for a month of football mayhem, starting on 11 June 2010, which is tipped to contribute around £1.5bn to South Africa’s gross domestic product and generate another £500m in government taxes.
South Africa character prices haven softened over the past year or so, due to a fall in residential need, caused by reduced housing affordability, higher inflation and interest rates.
But residential prices could soon experience growth, on the back of what should be a reinvigorated economy, spurred by the football tournament.
While the odds may be stacked up against the South African football winning the World Cup in 2010, it is not too far fetched to assume that the country’s housing market could prove to be the real winner of the tournament, generating meaningful returns for character investors in the time of action.