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4 hotspots to look out for in 2007!
International property company escapes2.com have tipped Panama City, Jersey, Istanbul and Slovakia as property hotspots for 2007...
Adrian McDermott, Managing Director of escapes2, commented, For 2006 we predicted areas such as Cape Verde and Morocco would be popular with overseas property investors and holiday home buyers, and while these areas are still offering excellent returns, especially with the recent introduction of direct flights from the UK to Cape Verde and an ever expanding range of flights to Morocco, I feel the following markets will achieve good levels of capital growth in 2007 and beyond.
1. Panama City
Known as the paradise of Latin America, Panama is very much at the top of the American investors list, although Europe is just starting to switch on to the investment potential. Property prices in Panama City are less than half that of American cities such as Miami, and coupled with the fact that the US dollar has been Panama’s currency since 1904 and given its current weak state, Panama looks a good bet for 2007.
The low cost of living and the numerous incentives for retirees has helped Panama to become the most popular choice for Americans looking to purchase property outside of their own country. Panama has a stable, solid and growing economy that is free from political problems with the economy growing 7.4% in 2004 and 6% in 2005. The recent vote in favour of widening the Panama Canal at a cost of some $8 billion will generate more jobs and provide a massive boost to the economy which should continue for the expected 10 year duration of the project.
2. Istanbul
Demand for property in Istanbul is growing rapidly due to migration within Turkey and many of the younger generation are now choosing to purchase their own homes earlier rather than living longer at their parents’ homes. The purchasing power of Turks is about to expand because of legislation that’s being passed to make land titles far more secure, opening up the opportunity of loan to value mortgages. This will bring their legislation in line with EU countries.
In Turkey because of the current high cost of borrowing from banks a culture of raising capital by alternative means has developed, therefore developers are often willing to reduce their profit margins substantially in order to raise the required capital to get their projects off the ground. For this reason Istanbul now represents great potential for Western Europeans as off plan development prices are considerably less than the completed projects local market value. As there are no loan to value mortgages available just yet, prices are still very low and represent the best time to be purchasing.
3. Jersey
Jersey in the Channel Islands currently has a strong rental market owing to a high proportion (27%) of residents living in rented accommodation and enjoys high rental yields compared to mainland UK. Contrary to popular opinion there are no restrictions on non residents buying property to let on Jersey.
The local government has recently decided to expand Jersey’s economy by allowing more licensed workers onto the island with the aim of increasing overall tax revenues. This will have the effect of making property for purchase or rent in even shorter supply pushing up rental yields as well as increasing capital growth. Unlike the UK mainland prices in Jersey have been almost static for the last six years, and only recently have property prices started to move upwards, (6% in the first 9 months of 2006) so we believe there is plenty of room for growth in 2007.
4. Slovakia
The final choice would be Slovakia, particularly the ski resorts in the High Tatras Mountains in the north east of Slovakia. Unlike Bulgaria it has been steadily attaining moderate levels of capital growth over the past few years without constantly being in the headlines.
The ski resorts have recently received heavy funding from Government and private initiatives and are set to become as good a quality as you would expect to find in France or Switzerland but at a fraction of the cost. The area is served by Poprad Airport, which has direct flights from the UK and is only 10km from the foot of the ski slopes.
Slovakia is considered to be one of the most stable countries in Central Europe and has no political problems. Slovakia is also the fastest growing economy in Central Europe with 6% growth recorded in 2005 and an estimated growth of 8% for 2006. Growth in the Slovakian property market has been sustainable due to the fact that it is Slovakians who are currently purchasing, although as the country becomes more widely known to outsiders, demand for property seems bound to increase.
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