Top 10 Property Investment Destinations in 2011
I’ve just read this article http://www.write-about-property.com/articles/top-10-property-investment-destinations-in-2011-705.php and I think it could be interesting for you. The 8th is for Malaysia
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Where are the best places to invest in residential and holiday property in this new world?
1: Turkey
I actually can’t believe that I am putting Turkey in number 1, but there is absolutely no choice. Turkey has rocketed out of recession and is now the fastest growing economy in Europe. With the EU crumbling and membership looking more like a curse than a charm, we can look at Turkey with fresh eyes.
To see that 8 years of reform under the AK party of Recep Tayyip Erdogan have turned Turkey into one of the most stable countries in the world. The budget deficit was 4% in 2009, and is currently thought to be running at 2%. Reforms to the banking system after the 2001 crisis, combined with the immature mortgage market left Turkish banks unaffected by the crisis.
At the same time low inflation and years of paying down debts gave the Central Bank plenty of room to bring down interest rates without fear of destabilising the economy, in fact interest rate drops were not a knee jerk response to the crisis, but a measured budgetary response to falling inflation. This can be seen in the fact that rates were once again dropped this week, at a time when most countries are starting to put them back up.
What really sums up present day Turkey vis-a-vis worthiness as a property investment destination is the great irony that Turkey ended negotiations with the IMF in 2009, and in 2010 both Ireland and Greece have been forced to accept financial aid from the IMF and EU in order to stay afloat.
The balance of stability, high growth, high liquidity, low property prices and low interest rates is sure to make Turkey a favourite with investors in 2011.
2: Brazil
20 million people brought out of poverty and 27 million people added to the middle class, just two key achievements of President Luiz Ignacio da Silva. Achievements he made through programs like the Bolsa Familar, a scheme to help people out of poverty, and Minha Casa Minha Vida to help low income families afford to buy a house, achievements that have brought about a housing shortage of 7 million and growing.
A housing shortage is one thing, but we are actually talking about real demand here, demand from people in a population of growing affluence, in one of the world’s fastest growing economies. But best of all, property investors can now benefit from it directly.
Affordable housing in emerging markets — especially those with huge populations, rapidly growing economies, and growing affluence — is a good investment but it has always been very hard for foreigners to buy into developments in such schemes; because they are aimed at the local community they are marketed in the local community.
That has been changed in and by Brazil, where foreigners can now invest in developments like Dr Gerlado Furtado, high quality affordable apartments in Central Natal city at 20% below market value. Golden opportunities like this, which are probably as close to zero risk as we will get in the property world, Brazil is sure to be a hot market in 2011.
3: Egypt
This is a market very similar to Turkey, but smaller in size and earlier in its development. Most of the research I do into Egypt concerns the holiday property markets in Hurghada, Sahl Hasheesh and Sharm el Sheikh. In these locations we have tourism rising rapidly, massive investment, massive development and some of the cheapest property in the world — a dynamite combo, not to mention the sun, sea and sand.
Sahl Hasheesh has the potential to be on a par with Monte Carlo or Las Vegas by the time it is fully completed in 2030, and all the locations are seeing tourism grow at around 20% per year from Britain alone.
But most of all, these locations are unique in the fact that their tourism sector developed hand in hand with their property markets, so we have the chance to buy holiday homes that are being managed as part of the mainstream holiday accommodation stock. This is why guaranteed rental yields of 8,10 and even 12% are so common here, and why Egypt property will be a hot market in 2011.
4: USA
In the USA property values have plummeted. So much so that it is not only repossessed and distressed properties that are presenting bargains, but those on the open market having had their price dragged down by the massive repossession levels surrounding them.
Across America opportunities like that are presenting themselves, and while it may be a few years before values recover, people are happy to earn above average rental yields while they wait. With repossessions expecting to show no signs of abating any time soon, but the economy thought to be finally starting to recover, we can certainly expect America to remain a hot market in 2011.
5: Spain
Experts are predicting that the Spanish property market could be flooded with distressed and repossessed properties in 2011, because of new rules enacted this September forcing banks to be more upfront about their seized assets and to write down the value of all 2 year old real estate assets by at least 30%.
According to Fernando Acuna, of Pisos Embargados de Bancos a Madrid based listings website, which is currently advertising thousands of foreclosed properties, there are currently 100,000 foreclosed properties on the market, and this could triple in 2011 due to the new rules.
Whether Acuna et al are right or wrong, we do know that — naming no names — Spanish banks have hundreds of millions of dollars worth of bad loans on their books, and there finally seems to be a realisation that they must acknowledge losses and start to think about real values if the market is to be able to move forward. In short: they need to cut their losses and move on.
With the recovery now strengthening, especially in emerging markets, including those in Eastern Europe, and finally starting to look more solid in the UK we are sure to hear a lot about Spain in 2011.
6: Philippines
The Philippines was one of the Asian economies that continued to grow strongly during the recession. But unlike the others that did so, your China’s and Singapore’s there is no talk of a property bubble, and prices remain undervalued in the country. This makes it an exceptional investment opportunity. You can still buy top quality 2 bedroom apartments in central Manila for just £52k.
Manila is developing rapidly, and apartments in the city are enjoying massive rental demand from the growingly affluent local population owing to growth in the retail, manufacturing, and services sectors. Currently, average rental yields in the city are 6%. However, in the Lancaster Atrium development mentioned above, which is a tri-tower development currently onto its third tower, yields of 8% are currently being achieved on the two completed towers.
We are also now hearing reports of wealthy expatriate Filipinos returning to the country and buying up real estate. With this and the growingly affluent internal population there is a strengthening exit strategy for Philippines’ property investments as well. With Asia becoming a hot bed for investment and growth, and investors keen to avoid bubbles that seem to be forming everywhere, the Philippines could be in for a big year in 2011.
7: Panama
Expect rapidly rising investment in Panama property as the US economy recovers in 2011. Panama has long been the number one destination for American retirees to buy property. The economy is to continue growing strongly as it has done throughout the crisis; according to the IMF the economy will show 6.2% growth this year, and 6.7% next year. With the Panama Canal — which along with the Colon Free Trade Zone accounts for 3/4 of Panama GDP — still proceeding towards 2014 completion, global investment in Panama will soar as the world economy recovers.
8: Malaysia
Another Asian tiger where we have no fear of a bubble. When Malaysia became one of the few countries in Asia to fall to the recession it did not look good. However, much like Brazil, the recession was short lived. In fact, according to official figures Malaysia fell into recession in the fourth quarter of 2008, and was growing back out of it in the first quarter of 2009, with a strong recovery beginning in the second.
The property market did not crash, because it did not have a bubble. While property prices in many Asian countries were growing at between 30 and 100 percent per year between 2002 and 2008, Malaysia’s growth was being carefully managed and kept at the sustainable level of 10% per year.
Thus homes remained affordable for the population and there was no problem with homebuyers overstretching on loans they couldn’t afford. This meant no overvalued property and no overleveraged owners, no sub-prime crash and no correction or bubble to burst.
Also, much like the Philippines property is comparatively cheap in Malaysia. You can currently buy high end 3 bedroom apartments in central Kuala Lumpur for just £90k. Now, with growth recovering throughout Asia, a focus still being put on stability, and Malaysia’s proven long term stability, it is sure to be a big investment hit in the coming years.
9: Lebanon
This is a strange one, what with its war torn history and frequently heightened tensions with Israel. But Lebanon is under the protection of the UN, and while that may not have meant much once, with the US under Obama, who is not as staunch an Israel supporter as his predecessor, and reliant on international support for the US’ expensive war campaigns as he tries to rebuild the economy Lebanon is safe for the moment.
That out of the way we have an economy that is growing rapidly and that has continued to grow rapidly throughout the crisis. In fact the IMF is predicting a growth of 10% this year and 8% next year, following growth of 7.5% in 2007, 9.3% in 2008 and 6.9% in 2009.
The 2006 war wiped the slate clean and investors are taking advantage to get in at the grass roots level as the infrastructure is rebuilt, telecoms, electricity, mobile telecoms, internet, satellite TV, retail, and outsourcing are all enjoying exceptional growth, as is construction and the property market.
With the war nearly 5 years behind it, Lebanon will be a lucrative property investment destination for those brave enough in 2011.
10: Indonesia
Not to jump on the Civets bandwagon but Indonesia has bags of potential as a property investment destination. It fits the Asian model of rapid population growth, population migrations from rural to city, and growing affluence in a rapidly growing economy. Property is still affordable for the local population and set for rapid rental and capital growth. It may not happen in 2011 but Indonesia will see a big jump in foreign investment.
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