Locating the Property Hot Spots

Although many property markets are stagnating, there are some areas which still have great potential for investment. In fact, according to a recently article in the Sunday Times, there are still a number of regions that are booming.

Asia is showing a great deal of economic growth, making it very popular with investors. The continent is home to 57% of the world’s population and its middle class is growing exponentially. In particular, Vietnam is demonstrating excellent investment potential due to rapid urbanisation, although the risk level may be higher than many investors are willing to accept. Malaysia is also showing a great deal of expansion, it is cheaper and the rules concerning foreign ownership are simpler than in many countries, lowering the risk level.

According to Knight Frank Bulgaria, Slovakia, Russia and the Czech Republic all recorded strong annual growth within Europe of more than 25% in the Q2 of this year.

In Latin America, Colombia is reported to be on the brink of being “the next big story”; however, problems with corruption and the country’s reputation for violence make it an investment destination which only the most hardy property investors should consider.

More attractive is Brazil, which has been a magnet for foreign investment magnet for several years. It has one of the most rapidly expanding middle classes in the world and it is also forecast to have a massive housing shortage in the years to come. The new middle class are looking for high quality, modern properties.

James Gonzalez, Market Analyst at Obelisk, believes the Sunday Times article is further proof that Obelisk is on the right track with its latest project in Brazil. “Obelisk’s Laguna Beach development has been attracting such great attention because it fits so perfectly into the needs of the modern Brazilian market. It is exactly the kind of development required by Brazil’s upper middle class who are looking for luxury second homes close to the sea. Such local demand maximises the possibility of resale when our clients are ready.”

For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).

Email: info@obeliskinternational.com or visit our website: http://www.obeliskinternational.com./

For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com.

No Sign of the Credit Crunch in São Paolo

This weekend the world’s leaders got together in Washington at the G20 summit in a global attempt to solve the so-called global credit crunch. But the ground for the meeting had already been prepared at one of the world’s up and coming financial capitals – São Paolo, Brazil.

Brazil holds the G20 presidency this year and hosted the São Paolo summit attended by G20 finance ministers and central bank governors. Brazil’s president, Luiz Inacio Lula da Silva, representing the world’s emerging economies led by the so-called ‘BRIC’ nations (Brazil, Russia, India and China), called for a reform of global financial institutions. Lula firmly believes that the International Monetary Fund should be restructured to reflect the importance of developing economies.

After years of financial and economic difficulties, Brazil is finally reaping the rewards and along with its fellow BRIC members, is set to become the world’s top economy by 2050.

At a time when many countries – and the eurozone – have slipped into recession – Brazil certainly has something to say when it comes to economy. Forecast by The Economist to achieve 5.3% GDP growth in 2008, Brazil’s economy has already achieved growth rates of 5.8% and 6% in the first 2 quarters of this year. Small wonder that Lula feels the G20 group should replace the G7 as a main forum for discussing global economy and finance.

One of the most palpable signs of the healthy Brazilian economy is in São Paolo. On a global scale, the city’s economy is huge – equivalent to the whole of Argentina’s – and so is its luxury consumer market, worth US$1.7 billion a year.

Along with football and going to the beach, shopping is top of the ‘Paulistas’ favourite pastimes. Designer labels such as Burberry and Louis Vuitton are popular haunts and Gucci is opening a second outlet in the city. São Paolo inhabitants also enjoy going on holiday and their preferred destination is within their own country – the north east region.

With its growing economy and increasing presence on the world stage, Brazil and its carismatic president look set to have a lot to say. That makes Brazil one definitely worth watching when it comes to investment.

For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).

Email: info@obeliskinternational.com or visit our website: http://www.obeliskinternational.com.

For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com.

A New Way to Invest in Spanish Property

Spain is a well-established overseas destination to invest in property and a prime favourite with investors from the UK – the Foreign and Commonwealth Office estimates that around 1 million Britons own a property in Spain. However, after a decade (1996 to 2006) of spectacular price rises when property values increased by a huge 190%, the Spanish property market is currently suffering from a downturn.

In an attempt to kickstart the property market and maintain investors’ interest in the country, the Spanish government has drafted new legislation for the creation of real estate investment trusts (REITs). Known as Sociedades Cotizadas de Inversión en el Mercado Inmobiliario in Spanish, the REIT legislation is expected to become law during the first half of 2009.

As a company, a REIT owns and operates real estate properties, and must regularly distribute a large percentage of its income as dividends to investors. In return, REITs enjoy substantial tax breaks. REITs were created in the US in 1960 as a vehicle to allow large-scale investment in property and currently represent an important segment of the US economy. US REITs have experienced a rise in their equity market capitalisation of over 30% in the last 10 years. REITs are also popular in the UK and Australia.

The proposed Spanish REITs will be exempt from Spanish corporate income tax (currently 30% and one of the highest in the EU), provided they invest 75% of their assets in lease-related residential properties. REITs must have a minimum of €15 million (₤12 million) of working capital and pay out at least 90% of rental proceeds and capital gains on sales of assets to investors.

Collective investment schemes already exist in Spain, but the introduction of REITs is expected to open up the Spanish property market, particularly the rental market, to large-scale investment. “The proposed REITs offer a potentially more dynamic vehicle for investing in Spanish property,” comments James González, Market Analyst at Obelisk Investment Property, “and may well kickstart Spain’s rental market.”

James points out that the long-term rental market in Spain is currently very small compared to other EU countries where around 30% of homes are rented. “With just 8% of properties available for rental, Spain has huge rental potential,” he says, “and the introduction of REITs as well as the recent government tax incentives should give Spain’s rental market a huge boost.”

According Barcelona-based property consultants, Aguirre Newman, Spain’s rental market is due to grow by 15% during 2008 with future high increases expected for 2009 and beyond. The new REITs may well push these expectations even higher.

For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).

Email: info@obeliskinternational.com or visit our website: http://www.obeliskinternational.com.

For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com.

Macedonia Property Hitting Investors’ Radar

Rugged and strikingly beautiful, Macedonia has been slow to reach the radar of international property investors. However, there have been signals lately that this might be changing.

With a population of just over 2 million inhabitants, Macedonia was part of the former Yugoslavia until it declared its independence in 1991. The tiny, land-locked country has lately been mentioned among the remaining Central and Eastern European (CEE) countries where foreign property investors can still find excellent value for the money.

There is no doubt that Macedonia has a lot to offer. Tourism has been steadily growing over the last decade. Visitors can enjoy skiing in mountain resorts or shopping in the cities such as Skopje, Bitola and Ohrid. The country also has numerous Hellenic and Roman archaeological sites as well as many world-class nature reserves.

Macedonians earn an average monthly salary of US$250.00; therefore, property values appear to be a bargain. Even so, prices are rising as demand outstrips their supply. As well, multinational companies are beginning to look at Macedonia as a location for possible expansion due to its low labour costs. According to Macedonia’s State Statistical Office, these pressures have led to property growth rate of 20% and an average annual rental yield of between 8% and 10% during 2007.

However, buyers should be aware of factors that can make purchasing property in Macedonia difficult. Mortgages, for example, are available from Macedonian banks but the terms can be burdensome. Some banks might ask for multiple sources of collateral, multiple guarantors and high fees can shock even the most jaded of investors. Also, all purchases by foreigners need to be approved by the Ministry of Justice, at additional cost and delay.

James Gonzalez, Market Analyst at Obelisk, sees Macedonia as a market to watch. “Although Macedonia is experiencing a great deal of growth in its property sector, it still needs to make numerous systematic changes to ease the burden on foreigners wanting to do business in the country, and especially if they are looking for financing there. These changes need to be made if Macedonia hopes to improve its chances of joining the EU.”

For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).

Email: info@obeliskinternational.com or visit our website: http://www.obeliskinternational.com./

For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com.

St Lucia: Cheaper than You Think

When many people think of the Caribbean, the word “expensive” often comes to mind. After all, it has been a holiday hotspot for almost as long as people have jetted away to enjoy a little time in the sun. However, there are still some corners of the Caribbean that offer excellent value for the money and St. Lucia is one of them.

A small island, measuring roughly 35km by 18km, St. Lucia is a land of exceptional beauty with high hills, rainforests and twin volcanic peaks. St. Lucia also boasts 160km of some of the most evocatively beautiful coastline in the Caribbean, an important asset for both holidaymakers and international investors alike.

James Gonzalez, Market Analyst at Obelisk, sees St Lucia as one of the lesser known Caribbean islands where bargains can still be found, although not for long. “The island is tiny, only roughly 630 square kilometres in area. At the moment prices are roughly half of those in neighbouring Barbados. However, the amount of new construction is so limited that as more people begin to view St Lucia as a possible investment location, prices are surely to rise.”

The island is also a member of the Commonwealth. English is its official language and there are numerous direct flights from the UK by both British Airways and Virgin Atlantic to St. Lucia’s two international airports. These ties make St Lucia even more attractive for the British buyer because although the island’s culture remains exotic and different, there is also a certain familiarity that reminds the British holidaymakers of home.

St Lucia offers a wide variety of holiday properties with the most popular being hillside villas, golf developments and waterfront homes. Generally, they are priced a well below comparable properties in many other Caribbean islands including the Bahamas, Martinique, Bermuda and Barbados. Buyers are strongly advised to make sure any purchase they make is hurricane proof, as in many of the Caribbean islands.

For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).

Email: info@obeliskinternational.com or visit our website: http://www.obeliskinternational.com.

For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com.