Emerging markets gaining ground on traditional hotspots
Currency specialists HiFX today releases its first Annual Global Property Hot Spots report into trends for Brits buying property abroad and looks back at what last year’s action tells us about the year to come...
In their first Annual Global Property Hot Spots report released today, HiFX report that France and Spain remained the two favourite countries in which to buy property in 2006. However, the currency specialists also report that both old faithfuls are losing out to a handful of emerging markets such as Bulgaria, Dubai and Cape Verde.
Mark Bodega, Marketing Director of currency specialists HiFX commented: “The global property market has avoided any crash predicted by doomsayers last year, but there has been a noticeable slow-down in overseas house price growth."
The 2006 Report also shows that British buyers are becoming more adventurous. According to HiFX there are a number of reasons for this. Firstly, property in these emerging markets can be considerably less expensive. For example, some Eastern Bloc countries such as Hungary and Poland still offer excellent value for money despite significant price increases in 2006. Many in the industry expect this to continue through 2007.
Bodega commented: “In many cases the emerging markets offer property which is significantly less expensive than the traditional favourites. As UK property prices have continued to rise dramatically in the UK over the last 12 months, combined with rising interest rates, we’ve seen the overseas property market open up and become accessible to more of the UK population.”
Secondly, HiFX attributes the rise in interest in more far flung destinations to a shift away from people purely buying holiday homes, towards more serious property investors.
Bodega commented: “As people look to where they can make the most money and returns, they are more likely to look away from the traditional markets to areas of expansion and new development”, says Bodega. “We’ve seen properties in the emerging markets snapped up by investors in 2006. Bulgaria remains a popular investment destination with investors keen to cash in when it joined the EU and we’re seeing a consistent amount of interest in Romania for the same reason.”
Differing motivations for buying property abroad
HIFX, which buys currency for 7-10% of Brits buying abroad each year (25,000 clients annually), concludes that Brits buying property abroad fall into three distinct categories, which reflect the changes observed in the market:
The Traditionalists: This is still the largest group and covers people who have bought property in France, Spain and other locations close to the UK. These people are mostly buying holiday homes or homes to retire overseas. The close proximity means they can use the home for regular holidays with cheap flights, easily rentable accommodation and a quick escape to the sun. These people also look for a well established expat community to help them feel at home even when they are abroad.
The English Adventurers: These people are more daring and want to go further a field for their holiday home. They don’t mind traveling long distances and also often consider emigrating to their holiday home at some point. The Adventurers are still sun-seekers but in a much more exotic location than the traditionalists.
Hot Spot Investors: This growing group of financially driven people want to buy in places like Germany, China, Romania, Croatia and Hungary which could offer excellent investment returns. These countries also offer buy-to-let opportunities as a large proportion of local populations are renters. However they should be careful as the “fad” of these countries could disappear just as quickly as they have appeared.
And for those currently thinking of purchasing property abroad, Bodega offered the following piece of advice: “At this time of year, as many people are making new year’s resolutions and thinking more about the future, their thoughts may be turning to buying their very own place in the sun, making an investment or even emigrating."
"For anyone thinking about buying property abroad, we always urge them to plan carefully and consider the currency risks associated with buying a property abroad – currency fluctuation can make a huge difference to the amount of money you pay and protecting yourself from these fluctuations should always be part of the planning process.”
Currency specialists HiFX today releases its first Annual Global Property Hot Spots report into trends for Brits buying property abroad and looks back at what last year’s action tells us about the year to come...
In their first Annual Global Property Hot Spots report released today, HiFX report that France and Spain remained the two favourite countries in which to buy property in 2006. However, the currency specialists also report that both old faithfuls are losing out to a handful of emerging markets such as Bulgaria, Dubai and Cape Verde.
Mark Bodega, Marketing Director of currency specialists HiFX commented: “The global property market has avoided any crash predicted by doomsayers last year, but there has been a noticeable slow-down in overseas house price growth."
The 2006 Report also shows that British buyers are becoming more adventurous. According to HiFX there are a number of reasons for this. Firstly, property in these emerging markets can be considerably less expensive. For example, some Eastern Bloc countries such as Hungary and Poland still offer excellent value for money despite significant price increases in 2006. Many in the industry expect this to continue through 2007.
Bodega commented: “In many cases the emerging markets offer property which is significantly less expensive than the traditional favourites. As UK property prices have continued to rise dramatically in the UK over the last 12 months, combined with rising interest rates, we’ve seen the overseas property market open up and become accessible to more of the UK population.”
Secondly, HiFX attributes the rise in interest in more far flung destinations to a shift away from people purely buying holiday homes, towards more serious property investors.
Bodega commented: “As people look to where they can make the most money and returns, they are more likely to look away from the traditional markets to areas of expansion and new development”, says Bodega. “We’ve seen properties in the emerging markets snapped up by investors in 2006. Bulgaria remains a popular investment destination with investors keen to cash in when it joined the EU and we’re seeing a consistent amount of interest in Romania for the same reason.”
Differing motivations for buying property abroad
HIFX, which buys currency for 7-10% of Brits buying abroad each year (25,000 clients annually), concludes that Brits buying property abroad fall into three distinct categories, which reflect the changes observed in the market:
The Traditionalists: This is still the largest group and covers people who have bought property in France, Spain and other locations close to the UK. These people are mostly buying holiday homes or homes to retire overseas. The close proximity means they can use the home for regular holidays with cheap flights, easily rentable accommodation and a quick escape to the sun. These people also look for a well established expat community to help them feel at home even when they are abroad.
The English Adventurers: These people are more daring and want to go further a field for their holiday home. They don’t mind traveling long distances and also often consider emigrating to their holiday home at some point. The Adventurers are still sun-seekers but in a much more exotic location than the traditionalists.
Hot Spot Investors: This growing group of financially driven people want to buy in places like Germany, China, Romania, Croatia and Hungary which could offer excellent investment returns. These countries also offer buy-to-let opportunities as a large proportion of local populations are renters. However they should be careful as the “fad” of these countries could disappear just as quickly as they have appeared.
And for those currently thinking of purchasing property abroad, Bodega offered the following piece of advice: “At this time of year, as many people are making new year’s resolutions and thinking more about the future, their thoughts may be turning to buying their very own place in the sun, making an investment or even emigrating."
"For anyone thinking about buying property abroad, we always urge them to plan carefully and consider the currency risks associated with buying a property abroad – currency fluctuation can make a huge difference to the amount of money you pay and protecting yourself from these fluctuations should always be part of the planning process.”
posted by tony at 5:28 PM
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