Archive for March 4th, 2008

Mar 04 2008

Time to Invest in the US

Published by under Real Estate

The Euro reached record exchange rate levels this week, rising as high as 1.5144 EUR against the US dollar: good news for buy-to-let investors seeking more affordable property in the USA with which to tap into a growing demand from many US citizens unable to enter the property ladder. The country is also witnessing a colossal increase in European tourists lured to the USA by the attractive exchange rate.

Tighter credit conditions and negative equity are forcing many US citizens out of the housing market, many of whom are leaving homes behind them that have become too expensive to pay for. Although this is a dramatic situation for many, it poses an incredibly good scenario for anyone wishing to make positive returns through buy-to-let investment property. As access to the property ladder becomes a back-breaking affair, many would-be buyers are opting for rental property instead. “Rent increases will exceed historical averages over the next three to five years,” said Orlando-based apartment builder Steve Patterson, CEO of Zom Inc.

‘As credit difficulties make it harder for people with less-than-perfect credit to obtain home loans, demand for rental units will increase’, Patterson said.

Perceptive property investors are already making their way to the “New World”. Recent figures produced by the National Association of Realtors have shown that foreign property purchases in the country are at an all-time high. The British are the main participants in this market, purchasing 12% of homes bought by non-US nationals in 2007, only exceeded by the Mexicans who purchased 13% of properties during this year.

Homes sold to the British rocket in Florida. Here, UK citizens make up 33% of international home buyers, only to be followed by the Germans, Canadians and Venezuelans with 7% each. The main reason for most of these property purchases was  investment with a view to renting out the property or providing a holiday home to both family and friends.

Buy-to-let investors can rest assured in the knowledge that the US, and particularly Florida, attracts tourists for many reasons. Theme parks and beaches aside, the sunny state saw visits from abroad jump about 7% over 2006 according to Nikki Grossman, CEO of the Greater Fort Lauderdale Convention and Visitors Bureau. And the reason? The weakness of the dollar against the euro and British pound. This is reinforced by the fact that 48% of purchases at Sawgrass Mills Mall (just outside Fort Lauderdale) were made with non-US credit cards, states Ms. Grossman. “Brits came to do their Christmas shopping. They bought suitcases, and filled them”, she explains. “To them, it was like a free vacation.”

With the recently approved Open Skies agreement between USA and the EU, prospects for investment property in Florida are only likely to edge upwards. Zoom Airlines is advertising return flights from London Gatwick to Fort Lauderdale in Florida for as little as £299.

So whether it is the sunny Florida or America’s Big Apple that rocks your boat, low US property prices, coupled with healthy rental demand, can generate positive income returns while you wait for the property to largely appreciate in value – something that is set to happen over time, once the credit crunch is over and prices ‘back home’ return to their normal levels.

Please see the charts below:

Source:  The NATIONAL ASSOCIATION OF REALTORS® Profile of International Home Buying Activity in Florida.  Used with permission.  Reprinting or retransmission of this data is prohibited without written permission.

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Mar 04 2008

New Tax Exemption Law Boosts Panamanian Investment Appeal

Published by under Real Estate

Panama’s property investment market has just scored another point in its favour: the new tax exemption law, coupled with many other existing tax benefits, make Panama an increasingly popular real estate investment location.

The finest piece of information on property investment in Panama comes from the country’s housing Minister, Balbina Herrera, in his announcement that the country will be extending its 20 year property tax exemption for foreign investors. Those who purchase property developments with building permits issued prior to 31st December 2009 will be exempt from paying any taxes on property transactions carried out in Panama until 2030.

According to Jose Boyd, president of the Panamanian Real Estate Association, (Asociación de Corredores de Bienes Raíces – ACOBIR), “What this does for the industry is fantastic. This does not just apply to new buildings and covers existing colonial style structures as well and will appeal to lifestyle, retiree and the pure investment buyer.

“This puts Panama in a privileged position in the Central American real estate community as our neighbours are having a hard time in the current economic climate and this is creative and shows the world that we are a happening and serious location for international property investment.” analyst, Sara Romera, concludes: “Panama City centre property performs immaculately in the investment scale – property appreciates well as in other quality negatively geared investments yet cash flow income returns are apparent.”

“The country boasts increasing visitor numbers, 85% of which remain in the city centre during their visit. The strong influence of the Canal is apparent, accentuating the city’s status as a commercial hub, offering a gateway between the Atlantic and Pacific Oceans.”

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Mar 04 2008

Spain set to see additional interest from investors

Published by under Real Estate

Spain is likely to attract renewed interest from overseas property buyers, an expert has predicted.

Nicola Christie of stated that major Spanish cities and coastal resorts have traditionally been the focus of interest from foreign buyers.

However, she said the incremental roll-out of new high-speed rail links across the country could help change investors’ preferences.

A service between Madrid and Barcelona has just been launched, which means that towns along the route will now be much more easily accessible.

Therefore, it is possible that property buyers could start considering parts of the country that have, until now, been “effectively out of bounds”.

Ms Christie commented: “News of yet more links to come over the next four years should ensure that more and more of the Spanish countryside is opened up.”

According to Holiday-Rentals, 31 per cent of British-owned holiday homes in Europe are located in Spain.

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Mar 04 2008

Russian investors favour Cyprus

Published by under Real Estate

A growing number of property investors from Russia are choosing to buy homes in Cyprus, experts have revealed.

The Royal Institute of Chartered Surveyors (Rics) stated that interest among second home buyers from abroad was encouraging growth in the country’s housing market.

According to the organisation, much of this interest has come from Russian property investors.

Rics said that consumers in the Eurasian country had not been as badly affected by the global credit crunch as people in the west of Europe.

As a result, they are becoming increasingly commonplace in the overseas property sector.

The organisation commented: “Russian and other purchasers are said to be becoming more prevalent.”

Rics added that the level of interest outside the “traditional” sources of demand was acting as a “key driver” of growth in the Cyprus property market.

The Mediterranean island recently became a full member of the single European currency.

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