Articles on Investment

On Friday, Halifax published figures confirming the value of a UK home fell by 2.4 percent in May, the seventh month in the past eight when prices have fallen. UK prices are now declining more rapidly than at any time since the early 90s property crash. And according to a key index of property price futures, this slide will continue for at least three years, crushing the value of a home by almost 50 percent in real terms. Indications from futures trading on long term property prices show the average UK home only recovering its current value in 2017.

Meanwhile, property prices abroad are showing ever increasing prices rises. And overseas property specialists, David Stanley Redfern Ltd, have a number of properties maintaining high capital appreciation and high rental yields.

Montenegro property, for example, is expected to grow in value by 15-20 percent per year, possibly reaching growth of 30 percent per year as the country progresses towards EU accession. Albania, also on the road to EU accession, is showing similar levels of growth. While on Margarita island, the only Caribbean island outside the hurricane belt, property prices have risen, on average, 32 percent in the last two years and prices are expected to grow by at least 15-20 percent annually in the next 2-5 years.

Thailand has also become a hot favourite with investors, who have enjoyed capital appreciation not lower than 25 percent in the first five years of its growth. While Philippines property is expected to grow in value by no less than 24 percent in the next five years and possibly even more in the next 2-3 years. In Fiji, David Stanley Redfern currently have studio houses from 25,000, likely to be worth 35,000 - 40,000 when they are built, and 60,000 - 80,000 in 2 years time. In Cambodia's Phnom Penh, growth in business and commercial sectors; rising affluence; and a rapidly emerging tourism sector will see property prices continue to rise by at least 15%-25% per year.

And these emerging markets look set to survive the global slowdown as businesses increasingly move their operations into cheaper locations, import their goods from cheaper places and tourists holiday in cheaper destinations.

With seemingly no way up for UK housing, now is the time to invest in countries with a brighter future.

Thirty-year-old Sarah Weir has just bought a two-bedroom property in southern Spain for £155,000. Twenty-six year old Jon Woods bought at three-bedroom house in Canada for £230,000. Helen Eaton, 34, recently bought a studio apartment with a sea view in Bulgaria for £40,000 while her boyfriend bought a studio in the mountains for £35,000. These are not second-home owners but the new generation of first-time buyers, who, frustrated with soaring house prices in Britain, are looking abroad for a way on to the property ladder.

Overseas mortgage specialist Conti Financial Services says it has seen the number of such buyers escalate recently, with enquiries steadily on the rise since a number of countries in Eastern Europe joined the European Union. Bulgaria, Turkey and northern France are the current hotspots.

'You can buy a one or two bedroom apartment for around £40,000 in Turkey or £60,000 in Bulgaria and you can still get houses for £60,000 to £80,000 in northern France,' said managing director of Conti, Simon Conn. The latest Halifax figures put the average house price in Britain at £192,233.

'Everybody wants to be on the property ladder and if they can't do it at home they will look elsewhere,' he said. 'It is normally studios and one-bedroom apartments that they are after. They are looking to double their money in four or five years and come back into the UK market.'

But a quarter of first-time buyers would now consider moving abroad altogether to save for a deposit to buy in Britain, according to a report by National Savings & Investments premium bonds, with Spain, Australia, New Zealand and the US the favoured destinations. A fifth would consider a move to Eastern Europe for a cheaper way of life, it said. Woods said, 'House prices here are crazy. I opted for Canada because you just get so much more for your money there.' His father put up half the money for the property; a three-bedroom semi-detached house in Three Sisters Mountain Village development near Calgary which they bought off-plan for £230,000.

Sarah Weir, who works in Henley in Oxfordshire, is buying her apartment in the Montecastillo golf and spa resort near Jerez in southern Spain. 'I haven't given up on the idea of buying in the UK,' she said, 'but I'm seriously considering buying again overseas in the future as I see it as a better investment.'