The saying ‘One man’s riches means another man’s poverty’rings truer than ever in today’s international real estate market. Price fluctuations, along with changes in demand and supply in different parts of the world are creating interesting representations of the value of money. Take for instance, what one million pounds sterling approximately $1.9 million in US currency can purchase.
In Edinburgh, you could buy an enormous town house boasting multiple reception rooms with expensive crown mouldings and chandeliers. Likewise, Oxfordshire offers you seven bedrooms, over six acres of land, and gardens.
Just east of Oxfordshire places you in London, where purchasing a home is an entirely different story. Because of a 28.6% growth in prices due to a combination of increasing demand and diminishing supply in prime real estate, the best locations in London could only give you 600 to 1,000 square feet. This increase in property value is largely due to wealthy foreign buyers from countries such as China, Russia, India and the Middle East. Instead of exchanging one piece of London real estate for another, these buyers come from outside the country, meaning the purchase of one property does not release the availability of another which ultimately drive prices upwards.
Despite this drastic difference in the UK, the value of the British sterling is not to be underestimated when taken overseas to the American continents, where foreign buying is not as rampant. Prices of apartments with dazzling Manhattan skyline views are down by a startling 34% from five years ago, giving you over 1,000 feet of luxury for $2 million. Prime locations in South America offer breathtaking island retreats with more rooms and luxuries than can be imagined.
In Angra dos Reis, a Brazilian city south-west of Rio de Janeiro with a beautiful coastline of over 300 islands, luxury villas are also a target for investment because of standard features like 8+ bedrooms, two saunas, swimming pool, waterfall, jacuzzi, barbecue, private beach and an ocean front pier. Like Brazilian broker Judice de Araujo Esteves says, “buying outside of traditional European and North American real estate markets is certainly more risky, but if they invest correctly, they can have better profits. This happens in all developing countries.”
The end result shows that moving out of the popular well-known areas of real estate and looking into carefully chosen emerging markets, opens up opportunities of high returns in the long run, which would only be a matter of time for parts of South America, Eastern Europe, and the far east set to become the next ‘London’ in real estate.
Read more about this over at Forbes.