Property Locations to watch in 2008…

With 2007 over and the stock market in the doldrums what is there to invest in now with reasonable risk attached? Not all markets were affected adversely by the US sub prime debacle. There is a life after and lots of investors have funds to invest in property so where should they invest for 2008?

The emerging markets are still a good bet but they are only suited to Investors who want to invest for 7 to 10 years. There are little or no opportunities for selling on before completion and this is too risky in any case because many of these markets don't yet have a developed resale markets.

The new markets on the radar screen are Egypt which is on the up especially for gated tourist resorts which have all the lifestyle facilities one could want and property from as low as €35,000, This market is popular already with Tourists and the tourists are now buying property there so developers expect a busy time there in the next 3 to 5 years.

Investment in Egyptian property is offering great opportunities for purchasers especially at this early stage of the vibrant fledging market. There are no

mortgages available yet but the government are planning to change the legislation so that mortgages can be made available there.

Major cities are currently attracting as much as 25% annual capital growth and there is increasing tourist demand for short-term rental accommodation in the resort areas. On both the Red Sea coast and the Mediterranean coast, property investors have enjoyed the best rental yields in the country from their activities here. Egypt's proximity to the European mainland and increasing tourist infrastructure mean that this market should grow as holidaymakers see the potential for owning a property in this historic and exotic location.

According to official Egyptian statistics, the United States tops the list of investing countries in Egypt. It is the largest petroleum and second largest non-petroleum, non-Arab, foreign direct investor in the country. The U.S. Department of Commerce calculated the stock of U.S. FDI at the end of Q3 2006 at $5.57 billion, representing 10.8% of U.S. foreign direct investment (FDI) in the Middle East and Africa.

Egypt has become, after South Africa, the largest market for foreign direct investment (FDI) on the African continent. FDI is increasing and rose from $700 million in the 2000/01 financial year, to $6.1bn for the year ending June 07, representing just under 5.8% of GDP. With a further $8bn expected to enter the Egyptian market from overseas in the current financial year.

This is sure to have an impact on the property market in Egypt in the coming years and should encourage buyers to buy now when the market is still maturing. Tourism is what drove the Spanish property market in the 90's and is what should drive the property market in Egypt as well. I predict a busy year for property buying in Egypt in 2008. Our recommended developments for 2008 has to be the new Marsa Alam development which is located in the south of the Egyptian Riviera on the Red Sea. The popularity of the region as a diving destination led to the construction of the Marsa Alam International Airport 65km north of the town itself. Construction is currently underway on an extension to this terminal in order to handle the increased tourist inflow into the now easily accessible area. With direct flights from London and many other European destinations now available, the area is seeing an explosion in tourism growth and development to cater for these tourists.

The development was released in Jan 08 and I predict will sell fast. It is the best value on the market with 1 bed apartments starting at €29,500 with 2 bed apartments starting at €39,500 but these are pre launch prices. It's a top class luxury development with all the facilities one would expect in a 5 star resort. It has unique selling features in that it's in an important diving area well known to this community worldwide. Going on the interest in this development to date I believe it will be a big winner for investors and it is also giving a guaranteed rent which increases annually over the 5 years and which averages at 10% pa. You can contact Aquarius Properties if interested in this development to info@aquariusproperties.com

Brazil is another interesting emerging market which is huge and which is also developing it's tourism industry. The lasting decline in domestic interest rates coupled with low inflation and high liquidity in the international capital markets have led investors to take a closer look at the giant Latin American market. The North East is the most popular location and property is selling there at prices that are a fraction of what you can purchase in Spain, Portugal or elsewhere and they also have the climate and the friendly people which are the ingredients to success. South America's biggest country also has large and well-developed agricultural, mining, manufacturing and service industries, a large labour pool, and is the richest Latin American country. Thanks to the initial phase of PRODETUR, the Brazilian government's 'Action Programme for the Integrated Development of Tourism', Brazil and its tourism industry have benefited from an injection of more than $670m into infrastructure improvements. This investment has resulted in the creation of 8 airports, construction and improvement of 1020km of highways, recovery of 732,000 sqm of historic heritage sites, environmental preservation of 70,426 hectares and the creation of 149 government bodies to manage these and other tourism activities.

According to the Minister of Institutional Relations, Walfrido dos Mares Guia, 900,000 jobs have been created since 2003. Due to the success of this initiative, PRODETUR 2 has now been set in motion with envisaged investment of around $400m and prolific improvements expected.

At present travel from Natal Airport to the North involves passing around a large estuary, but now thanks to this new government funding a bridge and highway are due to be completed this year, which will reduce travel time to approximately 30 minutes. Also the Big Investors are investing in Brazil which shows great confidence in this market in the long term. And Morgan Stanley Real Estate has just launched a $200 million fund focusing mainly on the residential segment. Foreign investors were also responsible for 75 percent of the funds that were raised as part of last year's eight IPOs in the sector, including Gafisa, GP Investimentos, and São Carlos Empreendimentos e Participações.

According to figures cited by the New York Times Brazil has seen an influx of foreign investment to the tune of $4.8 billion (£2.4 billion) since 2005. As a result, building and construction activity has also seen a boost in activity.

"There is a stronger demand for houses," commented Joao Crestana of Secovi, a confederation of constructors and developers.

"There is a housing deficit, and now there are people with money to buy them."

Investors looking for lucrative opportunities in Brazil can take advantage of recent growth in market activity with a view to profitable long-term investments.

Luiz Ribeiro, manager of HSBC GIF Brazil Equity fund, said that Brazil's investments market is on an upward trajectory following recent upgrades by ratings agencies Fitch and Standard & Poor's (S&P)....

Brazil is a serious property investment location now and buyers should think long term. There are several foreign developers there building high end luxury gated communities. It is also an easy location to purchase with freehold titles and no restrictions. There is also good rental potential because of a shortage of luxury 5 star hotels. Aquarius Properties have several top recommended developments in Brazil in 2008 some which are front line beach. I highly recommend this market to Investors provided they are thinking of investing for 7 years plus.

Montenegro which is now in the EU is a very interesting niche property market and with premium locations to build in but with limited space as it's a small coastal Country with only around 700,000 people and with a lot of potential. It is an upmarket property location which is already hot with the Russian market and Northern Europeans love it as they can drive there every summer for their annual holidays. I expect some new developments to come on the market in the next year and they should sell quickly. There is also good rental income potential in this market because there is also a shortage of high quality hotels there. The First Gulf Bank of the United Arab Emirates has set aside around EUR 1 billion for investments in Montenegro. Also the Montenegro railway infrastructure will be rehabilitated along the main trunk line connecting the Port of Bar and the capital Podgorica with Belgrade and Pan-European Corridor X, thanks to a €34m loan from the European Bank of Infrastructure (EIB). The total cost of improving the railway, once officially approved, is expected to be €68m.

Tivat Airport in Montenegro has reported a significant increase in the number of passengers travelling through the airport, a new report reveals. According to the Visit-Montenegro.com tourist and travel news website, some 351 airliners landed at Tivat in the first two-and-a-half months of 2007 - an increase of nearly three-quarters over the same period in 2006.Ranko Boskovic, director of Tivat Airport, told the Vijesti newspaper that the facility has targeted a further 15% of growth in 2007, bringing the total number of passengers to around 500,000.

However, he noted that this could be turn out to be a modest target, given the strong traffic figures so far seen during 2007. Part of the reason behind the projected upturn in passenger numbers is the route expansion currently underway at Tivat Airport, which will include more cities from Germany and France, as well as airports in former Soviet countries. Tivat Airport is one of two international airports in Montenegro, the other being in the capital Podgorica.

I predict a good buying season in this market in the upper end of the property market there. I don't expect too many cheap properties coming on the market because land there is too expensive and the government want to attract the right kind of tourist more fly and drive than package tour operator tourist.

Morocco

Morocco has been a busy property buying location for about three years now and it has still got a lot of value left. Buyers should focus only on beachfront developments that are also high end. They should also look for developments with all in management and rental services attached. What sells Morocco is it's climate , its culture, its wonderful people, its way of life as well as having a low cost of living. It's ideally suited to those who want something different and who want a holiday home without breaking the bank. A big plus for Morocco this year will be the ease of access. According to OPP, following EasyJet's recent announcement for flights into Morocco, Ryanair has just signed a deal with the Moroccan government. This follows six months of negotiations. Travelmole reports that Ryanair will gain access to most regional airports in Morocco and in return has committed to opening up to 20 routes delivering one million passengers a year by the end of the five year period.

Property in Morocco is affordable the average cost per square metre for a property in Morocco (€750-€1,500) is roughly half of that for Spain (€2,000) or France (€2,400). There is no inheritance tax when a property is passed on to a family member, capital gains tax ranges from 0%-20%, and new properties are exempt from most property taxes in the first five years of ownership. The rental market is strong with high occupancies achievable. It has easy access because of its geographical proximity to Europe and good travel connections make it an easy place to visit. Quality of life there is good and there is a low cost of living.

According to OPP, Emaar Properties and Dubai Holding have signed agreements with the Moroccan government to develop nearly $19 billion worth of major real estate properties.

According to a report in the Khaleej Times, Dubai Holding will develop projects worth $12 billion in major Moroccan cities over the next five years, while Emaar will be investing $6.8 billion in six projects - after signing a new $5.3 billion Memorandum of Understanding (MoU) with the King Mohammed VI, King of Morocco.

Dubai International Properties (DIP), the international real estate investment arm of Dubai Holding, will develop a series of projects in Morocco in partnership with CDG, one of the biggest Moroccan companies. The $600 million Dubai Towers project - comprising Casablanca and Marina de Casablanca - was also announced as part of the agreement. The mixed used development will offer hotel and office space in each tower. Marina de Casablanca, worth $500 million, will also feature offices, retail and entertainment facilities, marina hotels, residential apartments, promenade and open landscape spaces, over a built-up area of 190,000 square metres. The projects also include Amwaj, a $2 billion community development project already under construction in Al Rabat.

This is only the start of what could be termed a big property boom to take place in this market in the next few years, maybe now is the time to buy. Aquarius are marketing the top developments in Morocco this year and are unveiling a whole new concept in Lifestyle property investment. It comprises of luxury properties in the best locations with world-class sports and leisure facilities on site including Olympic size swimming pools, football pitches built to International Sports standards and every lifestyle facility a holidaymaker could ever want. These top class resorts will attract International Sports Stars both as investors and also to use as training grounds because there will be nothing to compare them with Internationally.

The prices for these properties will start at around €85,000 and will have a guaranteed rental income as well.

If you are interested in investing in one of these World Class Resorts contact Aquarius Properties on info@aquariusproperties.com

Turkey

The Turkish economy has made steady progress for the past seven years. Since 2000 it has been making strides to become a more modern country with good infrastructures. Turkey is a modest country never out there pushing its weight around but slowly gaining ground in the top world economies and a most interesting country to watch. It is a mainly a Muslim country but secular in it's outlook and this is ingrained into the physic of the people ever since Ataturk ruled. Their constitution as well as their strong army are pro the secular state. The people there value this and it's what has made Turkey such a strong country economically. I have been travelling to Turkey several times yearly since 2000 and I have learned a lot about the people.. They are well educated; they produce over 400,000 university graduates annually. There are many interesting facts about Turkey. It has a population of over 70 million with an average age of 29 and 65% below 34 years old. They are young well educated and motivated professionals who intend to continue the economic progress of the last seven years. Exports increased 240% in 4 years up to 85 billion USD as of 2006. GDP increase of 122% in the past 4 years reaching 400 billion USD.

It is ranked 17th largest economies in the World and is the 6th largest economy when compared with the EU member states. It had FDI worth 20.2 billion USD in 2006 and annual average GDP growth of 7.4% per year since 2002.

Turkey was chosen as the top real estate development market by Urban Land Institute/Pricewaterhouse Coopers. Prices have increased between 50-80% in the past two years. House prices are kept within an affordable level because mortgages are not readily available yet in Turkey. There are 679,600 new homes needed every year to meet the growing domestic demand, and currently less than 1% of all home purchases are made by mortgage loans. Now that mortgages are available for the first time in Turkey developers there are expecting a boom time there for the next few years. It's estimated that in Istanbul alone some six million units need to be constructed and completed by 2012 to meet demand at its current levels. With the growing middle class being added to an already affluent population we expect 2008 to be an important year in the Turkish property market and should bring great returns to those who decide to invest there. What's important with property investment is not to follow the crowd, rather pay attention to the facts. I would recommend investors to purchase property in Turkey as part of their portfolio for 2008.

Aquarius Properties have several great properties in Turkey for sale and can highly recommend this location for both lifestyle and Investment. Contact info@aquariusproperties.com for more information.

Dominican Republic.

For the past 25 years, the Dominican Republic with a population of over 9 million people has transformed its tourism sector into one of the most dynamic in the region, and it continues to move ahead with exceptional growth. As the country's biggest revenue earner, tourism has grown at an average annual rate of 12% and in 2006 accounted for approximately 21.3% (US 8.1 billion) of its GDP. Moreover, the sector also generates 656,000 jobs, 18.4% of the total workforce, and generates almost half of the country's foreign exchange. According to the World Trade and Tourism Council Travel & Tourism in the Dominican Republic in 2007 is expected to generate USD 7844.3 million of economic activity (Total Demand).The Dominican Republic's Travel & Tourism Economy (direct and indirect impact) in 2007 is expected to account for 19.6% of GDP and 593000 jobs (17.0% of total employment).The Dominican Republic's Travel & Tourism is expected to grow 2.6% in 2007 and by 3.4% per annum, in real terms, between 2008 and 2017. Hotel developers are working to keep up with the demand. The number of rooms grew at an average annual rate of nearly 3% during 2000-2005, and 2006's at around 8%. This brings the total number of rooms on the island to 65,000

Access There are five airports in the Dominican Republic, four of which can be reached by non stop flights from the New York area. Punta Cana International Airport, the country's reigning airport in foreign arrivals, recorded 1.7 million arrivals in 2006. This is 16.6% more than visitors recorded during the same period in 2005, which confirms the increasing demand among international travellers. The Punta Cana tourist area has become the top destination, not only for the Dominican Republic but for the Caribbean as a whole, and the airport expected to serve two million passengers in 2007. As airlines pick up on the trend, scheduled airlift and charter service to the region will continue to improve. . Punta Cana International Airport is the preferred Dominican international airport with approximately 50.94% of all foreign arrivals due to its close proximity to the popular resort hotel.

The Fort Lauderdale-based newspaper, South Florida Sun-Sentinel reports that Americans are making the Dominican Republic their No. 1 vacation spot. Reporter Doreen Hemlock explains the destination got its latest marketing boost when tycoon Donald Trump signed a US$1 billion-plus resort and residential development on the East Coast and chose the glamorous winner of The Apprentice, California lawyer Stefani Schaeffer to direct the operations. The report in the business section of the Sun-Sentinel explains that a recent shift to more upscale offerings, geared more to U.S. visitors with less time and more buying power." She was referring to the US market grabbing a greater share of room nights from traditional tourists from Canada, Europe and South America that would easily stay two weeks straight. "The Dominican Republic has truly gone through a transformation," said Scott Berman, who leads hospitality consulting for Price Waterhouse Coopers in Miami. "The rest of the Caribbean became so expensive from a land perspective that the Dominican Republic was in a class by itself."

This is great news for investors who purchased properties in the Dominican Republic where occupancy rates soared to around 90% in the past few years. The overall average occupancy rates are in excess of 80% and hitting 90% in some areas especially the location of Punta Cana close to the International Airport. Combine this with the fact that they have excellent access and up market accommodation the best buys for property investors is in the high end 5 star locations. Some of the developer are so confident about the rental income that they are offering buyers guaranteed rents of up to 8% pa.

The best buys in the Dominican Republic are properties in high end gated communities with all facilities and top class hotels. Dominican Republic is a popular destination for American and European holidaymakers and, in particular, North American investors. A total of 3.3 million tourists visited the Dominican Republic in 2006. Tourism is growing at around 6% pa.

Of this a million visitors came from the US, 500,000 from Canada and 240,000 from Britain.

The government introduced legislation to incentivise investment in tourism by introducing for a ten-year period:

  • No tax on Purchase of property
  • No Capital gains tax
  • No tax on rental income
  • There are no restrictions on foreigners purchasing property in the Dominican Republic
  • There are no restrictions on foreigners inheriting title to land.

So ask yourself why would you not purchase a property in the Dominican Republic !

Our recommended development there is the Punta Perla Golf Marine and Spa Resort. This resort which just starting to be built this year is set within a 10 million sq meters of the Punta Cana region offers Investors the best investment opportunity in this market. The development has won several International awards already including being winner in the category for International Marina Development 2006. They also won two other awards for 2006 at this event which is dubbed the Oscars of the property industry.

The three awards Punta Perla won were….

  • Best Property Award - Star Island Bungalows
  • Best International Marina Development
  • Best Development Caribbean

These awards recognise the calibre of the development under construction in the 1000 hectare ( 2718 acre) resort. You can purchase property on this development from around $285,000 up to over 1 million dollars and the weak dollar is a big attraction for buyers to purchase this year.

Contact Aquarius Properties on info@aquariusproperties.com if you require any further information about this development.

Bulgaria

Bulgaria was ranked the top performer in Q3 of the Knight Frank Global Property Price Index coming in with a year on year increase of 30.6% as compared with the Germany which came in with a - 3.4%. The Bulgarian economy has also faired well with GDP F/C at 6.2% in 07 and 6% f/c in 08. The real estate market in Bulgaria shows no signs of a slowdown. Unemployment rates in Q3 continue to reduce and were at 8.4% down from 9.1% in the last qrt of 06. Property in Sofia is a good buy for those who want to invest for the long term. This city has to develop and prices should increase over the long term. The ski resort of Bansko is also doing well despite the amount of developments there and they are having a good 08 ski season to date. For young ski enthusiasts it's a good choice because as well as enjoying the sking they have a cheap property to enjoy themselves all year round. Several golf courses are being constructed in the area as well and the Pirin mountains are one of the most famous Mountains in Bulgaria. They are the second highest mountain range in Bulgaria after Rila (2,925 m) and the sixth highest in Europe

In order to protect the rich wildlife in the mountain the Vihren National Park was created in 1962, which was renamed Pirin National Park in 1975. It has an area of 403,32 km². The park protects the largest forests of Macedonian and Bosnian Pine in the country as well as many rare and endemic species. There are several nature reserves which account for 15% of the total area. The National Park was designated a UNESCO World Heritage Site in 1983.

Sofia Bulgaria

Sofia, the capital city of Bulgaria is the country's financial hub, home to the Bulgarian National Bank, the Bulgarian Stock Exchange, as well as some of the country's largest commercial banks (such as HVB Bank Biochim, Bulbank, DSK Bank and United Bulgarian Bank). Increasingly Sofia is attracting attention as an outsourcing location for Western European and American multinationals. Sofia is also the headquarters for major Bulgarian and international companies operating in Bulgaria and Eastern Europe. Home to Sofia Business Park, a major European business centre comprising 200 multinational companies, employing up to 2,000 employees. As the 15th largest city and fastest growing economy in the European Union, Sofia has recently witnessed an unprecedented rise in demand for high quality apartments to house its ever increasing workforce. This has lead to a booming real estate market with prices doubling over the last 5 years. Prices are expected to continue to rise at a rate of between 15% to 20% over the next five years. Bulgaria's move towards full EU membership has resulted in the country benefiting from substantial European Union funding.

This has proven to be a significant stimulant for Bulgaria's economic growth. Millions have been ploughed into the country, primarily to upgrade the country's infrastructure, as well as supporting projects that go towards restoring historical architecture and tourist destinations. Strong capital growth is expected as the market begins to mature; creation of jobs from FDI boosts wealth and disposable income stimulating demand for property. As seen in other former communist countries, Bulgaria's EU membership and adoption of the Euro drives investor confidence in the market.

Sofia, as a capital city however, holds a higher concentration of businesses and migrant workers attracted to the city from across the country, presenting a well developed rental market. Property in the city centre and similarly close to the Sofia Business Park is ideal for investors looking to invest in a city with capital growth potential but also earn an income by way of rental returns. One such project we are recommending to clients is the FOT Residence in Sofia which is in the southern district of Sofia which is 10 minutes drive from the city centre. This development is situated in one of the most sought after areas of Sofia, close to the Vitousha Mountain. Residents will enjoy the facilities on offer from their neighbours at the Olymp Park Hotel and the Ambassador Hotel. This development is minutes from a 15 theatre Arena cinema, a large Holiday Inn hotel, 2 hyper-markets, 15 restaurants and a retail centre. There is cross country and down hill skiing for all levels only 10 minutes away at the ski gondola. Many of the worlds embassies have taken addresses within close proximity of this complex, making this part of the city one of the most venerable and secure. This project will be run as a high end hotel development and for investors there is a guaranteed rental of 6% per annum which can be renewed thereafter. Bulgarian mortgages are also available for this residence and Aquarius can assist clients with this. Prices are from €118,927 for large one bedroom apartments and €170,517 for large two bedroom apartments. Aquarius have a choice of property all along the coast of Bulgaria and in the Ski slopes from as low a price as €60,000.

Panama

Buyers are being enticed by the kind of double-digit appreciation that has not been evident in the States for some years now. In addition, a growing number of new developments are targeting Americans looking for good deals and a lower cost of living. With the exchange rate of £1/2$ and 1 Euro/1.47$ you can make a big saving on the price of your new property. Additionally by buying well and in a location with high occupancy levels you can be assured that you will be able to pay your mortgage and ideally if you can purchase a property with guaranteed rents.

What is unique about property in Panama and what differentiates it from the other South American Countries is the fact that it's service industries account for approximately 75% of Panama's GNP and Panama has the exclusive right to use the US Dollar as its par-value currency. The government and the Panamanian business community actively encourage Foreign Direct Investment (FDI).

Unemployment rates in Panama have also been falling steadily in recent years. It is estimated that this trend will continue owing to the increasing construction planning applications, as well as plans to expand the Panama Canal which is estimated to create in the region of 10,000 jobs. Indeed, in commercial and economic terms Panama is one of the most buoyant countries in Latin America with a per-capita income of $6,300.00 that is Central America's highest. In Panama City a Wall Street-style financial district comprises a dazzling mass of gleaming skyscrapers and capital crime rates are far lower than in many cities. Los Faros de Panama a new development on offer to Aquarius clients, is a unique project which will change the sky line of Panama,.

The design of the project will fundamentally incorporate the environmental factor with the use of solar energy, waste treatment and recyclable elements. At 346meters in height to its crown, and with 84 stories, the central towers will be on of the tallest residential use towers in the world. Each of these towers will be 260meters in height and have 74 stories. This will be the prestige trophy building in the city unmatched by anything in this part of the world. Everyone will wish they had bought one there when it's completed and standing majestically towering over the City of Panama. Maybe now is the time to purchase. For a high end world class luxury development of properties such as these the prices are highly competitive. Prices begin at $293,667 / €199,773 for a two bedroom apartment and go up to $672199 / €457,278 for a three bedroom apartment. Up to 70% mortgages are available for properties in this development through a variety of banks such as HSBC, Banistmo, and BBVA and interest rates are in line with U.S. rates. The rental market in this area is very strong and the developer is offering a rental guarantee.

2008 will be an interesting year for the Overseas Property industry. There has never been such a variety of property on the market in so many countries. It is easy for buyers to get confused. It is essential that clients deal with reputable agents who know their business and who can assist them in making the right choice of property for them.