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World Cup winning property markets – Marketwatch

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  • 11/06/2014
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World Cup winning property markets – Marketwatch
World Cup fever is upon us and after a dose of sunshine and cold beer investors may be inclined to let their minds wander further afield to consider snapping up second homes or rental properties.

While Brazil, the host nation, and Argentina may be equal favourites to win the tournament, they fare less well as the safest bet for oversees property investment.

This week we asked our panel of experts which countries offered investors attractive opportunities to make money from bricks and mortar.

Clare Nessling, director at overseas mortgage specialist Conti, examines the fortunes of the Italian and American property markets

Christian De Meillac and Mark Harvey of Knight Frank look at the best deals for property investors in Spain, Portugal and France

Ged Rockliff and Kieran Kelleher of Savills, discuss Austraila’s supply problems and bargains to be snapped up in Croatia if investors act now

clare-nessling-contiClare Nessling, director at overseas mortgage specialist Conti

They may not have much in common when it comes to World Cup wins, but one thing which Italy and the USA have in equal measure is their current appeal to British property buyers.

Driving this increased interest is the strength of the pound effectively giving buyers more bang for their buck, or their euro. A €200,000 property in Italy, for example, now costs £162,602 compared with £175,439 at the start of August 2013.

The Italian property market has remained remarkably intact primarily because it was never heavily involved in the sub-prime lending market. Nor has it suffered the effects of the over-development of property like Spain.

Investors like this stability. The country hasn’t been immune, however, to the recent lack of property buyers so although prices are already still 25% below 2008 levels there’s plenty of room for negotiation.

Investors are increasingly confident about property prices rising and don’t want to miss out on the best deals.

The US housing market crash of 2007, on the other hand, was the worst in the country’s history leading to price falls of more than 30% in nominal terms.

Fast forward to 2014, however, and things are looking rosier. Property prices are still low but have risen by 10.3% over the last year according to Knight Frank, and this, together with a slowly improving economy, is drawing buyers back.

Although some moderating influences, such as rising mortgage rates, are expected to lead to a slowdown in price appreciation they’ll also contribute to a more balanced market.

christian-de-meillacChristian De Meillac (pictured) of Knight Frank comments on Spain and Portugal

Spain’s market is turning around led by the Balearic islands. Mallorca’s market is solid and we are seeing signs of prices flattening and stock in the best areas is becoming limited.

The west coast, from Andratx to Formentor is the hottest! Ibiza continues to attract a very international market and is extremely popular as a second home destination and becoming more and more of a hub for European families.

The new development of Calaconta in the south west is the first of its kind to offer a gated, secure community with a concierge service. Marbella and Sotogrande continue to attract buyers that are again seeing value on the mainland.

Meanwhile the cities of Madrid and Barcelona are becoming more international and attracting both lifestyle buyers and investors – not to mention are homes to two of the best football teams anywhere.

The Algarve is still the mainstay of Portugal. Situated just two hours from almost any European hub and sunshine that is almost guaranteed, established resorts such as Quinta do Lago and Vale do Lobo are leading the return of the market with a marked increase in sales this year.

Actually, the England football team was recently staying in Quinta do Lago for some warm weather practice. Further west near to Lagos and Luz, where prices had dropped 40% in some cases, is popular amongst second-home buyers as a location where you can enjoy the same climate and get more for you money.

But there are limitations. There is no big city nearby but access is easy year round and sunshine is almost guaranteed!

Mark Harvey of Knight Frank comments on France

After more than two years in the doldrums the French property market is beginning to show some encouraging signs of life.

Enquiries are up and whilst transaction levels trail those of 2012 some commentators are beginning to see the bottom of the market. Welcome news for many although perhaps a little too early to pop the corks as Mario Draghi and the European Central Bank continue to grapple with very feeble fundamentals.

ged-rockliff-savills-australiaGed Rockliff (pictured), head of residential projects for Savills Australia

The residential market continues to remain attractive to investors. Whilst it doesn’t have the same liquidity as that of the stock market there is a greater level of security in terms of underlying value. It is also an asset class which is easily understood.

In terms of capital growth and rental yields residential investments are still proving to be very attractive, added to this, Australia remains to be faced with an undersupply.

Whilst there are a lot more prospects coming to the market with record levels of immigration and population growth there is still the need for further supply.

This shortage of supply has also led to record sales with residential developments, in some instances, selling out within a day of being launched to the market. Not only is this occurring in Sydney but in the surrounding and outer suburbs of Sydney and at all price levels.

Kieran Kelleher, head of Savills Croatia 

House Prices have been falling in Croatia for six years. Imagine a European capital city where the average price per squared metre for downtown property is under €1500. One would not think this possible in 2014 – but it is and there is plenty stock available in Zagreb.

Prices on the coast, other than delightful Dubrovnik which remains fairly resilient due to low supply and moderate demand, have not fared much better. Buyers could pick up a very nice two bedroom apartment close to the water in Split for well under €100,000. Istrian villas look great value at under €2000 per square metre.

Indicators are showing that the market has bottomed out and key now to investors and holiday home buyers is to making that decision between holding out too long (as many in Dublin are regretting) and diving in. Many experts agree there is nowhere else for the prices to go but north.

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