Beachside villas in Brazil, high-rise apartments in Kuala Lumpur, log cabins in Lapland … growing numbers of British property investors are looking far beyond the traditional second-home and holiday-letting haunts such as France and Spain.Armed with profits, courtesy of the UK house price boom, thousands are hoping to strike gold again by successfully picking the next property hot spot.
Many will be making a beeline for the Property Investor Show at the ExCel exhibition centre in east London this weekend. Organisers claim it is the largest dedicated property investment event held in the UK, with almost 300 exhibitors. The fact that around 60% of this year’s show will be dedicated to property outside the UK, provides proof, if any were needed, that millions of us seem to have become obsessed with owning our own place in the sun – somewhere we can escape to, or which is going to effectively be our pension when we are older.
Anyone attending will be monstered by agents and developers pushing apartments on Bulgaria’s Black Sea coast. Specialist firm Assetz recently looked at prices and rental returns in various locations and found that over the previous 12 months, Bulgaria had been the star performer, boasting a typical gross rental yield of 12% and a “total return on cash invested” of 116%.
But that was the early investors; future returns are likely to be far less sparkling. Below, we’ve highlighted some of the more exotic locations now coming on to our radar – including Lapland and Cape Verde off the African coast. Property firm, Alexander Richards, says Brazil is the place we will be hearing a lot about over the next year or two. Already prices are rising at 20%-plus a year, and the (relative) proximity of the country’s north east coast for European holidaymakers, new international airports – plus villas starting at around £75,000 – are bringing in swarms of investors. Many of the buyers are British retirees, living the good life on under £1,000 a month.
Whether any of this is environmentally sustainable is, of course, a different, but very worrying issue.
Why there? Most holiday properties are on sale in the north east beach areas closest to Europe, from established areas such as Fortaleza and Salvador through to less developed coastal areas around Natal. Prices start at £40,000, while £150,000 buys you a luxury villa. Beachfront building plots of 500 sq metres sell for around £60,000. Prime beachfront apartments in big cities such as Rio and Recife start at £250,000-plus.
What’s on offer The three-bed villa is £75,000, 70 miles from Fortaleza. It is part of a beachfront development of 12 properties and a boutique hotel. Contact alexanderrichards.co.uk or call 020 8123 4029
How you get there Flights via Lisbon to Fortaleza. No direct flights from UK. Other Brazil locations (such as Salvador) have direct and charter flights.
Advantages More than 300 sunshine days a year. Prices in Fortaleza rising at around 20% a year (in dollars). European developers much in evidence, in the belief that there’s the same potential as Spain and Portugal 30 years ago.
Disadvantages Flights take 11 hours, cost around £850. Very underdeveloped mortgage market (repayments run over five years!) and rental market limited. Carbon emissions may make such jaunts out of the question.
Why there? If the beach isn’t your thing, how about a holiday home inside the Arctic circle? The regions of Yllas and Levi lie in the midst of the unspoilt arctic wilderness of Lapland in northern Finland. This is the land of the midnight sun and home of Santa Claus. The average house price in Finland is £105,000 and promoters say prices are set to go into orbit.
What’s on offer A one-bedroom log cabin in Yllas could be yours for £90,000, according to specialist firm Above the Arctic (abovethearctic.com). Meanwhile, £315,000 will get you a four-bed cabin with a sauna, heated parking spaces, open plan loft, two lounges, and storeroom for your skis.
How you get there Yllas is an hour’s drive from Kittila Airport and flights from the UK cost about £570. Alternatively, Scandinavian budget airline Blue1flies from Stansted to Rovaniemi (about 90 minutes from Yllas) from £81 each way – but you have to change in Helsinki and either Copenhagen, Stockholm or Oslo.
Advantages Finland is ranked among the safest and least corrupt countries in the world, and property has enjoyed decent capital growth in recent years.
Disadvantages Can be expensive and tricky to get to.
Why there? Cape Verde is a group of islands 300 miles off the west coast of Africa, touted as the new Canaries.
What’s on offer Cape Verde Property (capeverdeproperty.co.uk) is selling four-bed villas in Vila Verde on the island of Sal for £250,000. However, the Delfini Resort on Boa Vista has new one-beds at £57,000.
How you get there There are no direct flights to Sal and Sao Tiago, bumping up the journey time. It’s not cheap either. Flights from Gatwick to Sal cost between £500 and £900. Direct flights from the UK to Sal start in November, bringing prices down.
Advantages Good capital appreciation over the past year. Warm and dry all year round.
Disadvantages High levels of poverty. Low rainfall leads to regular and severe droughts.
Why there? This is Hungary’s substitute for a coastline. One and two-bed apartments start at about £48,000 in the resort of Balatonalmadi.
What’s on offer BL Yacht Club is an exclusive gated development being built on the south side of Lake Balaton. Studios cost £69,950 and three-bed penthouse apartments £217,500 through property broker Big Real Estate (bigrealestate.co.uk).
How you get there FlyBalaton Airport opened in April and Ryanair flies there direct from Stansted.
Advantages Millions of yacht enthusiasts as well as Germans, Austrians and Italians go each summer. All hotels and apartments were fully booked at times this year. It’s fairly cheap and easy to get to.
Disadvantages It is something of an unknown commodity.
Why there? The town of Herceg Novi in Montenegro’s Kotor Bay gives you some idea of the place’s appeal.
What’s on offer Property Frontiers (propertyfrontiers.com) is selling studios for £28,000, one-bed apartments for £40,000 and two-bed apartments for £77,000, all in Kotor Bay.
How you get there Flights to Tivat Airport, 8km from Kotor Bay, start at around £666 and involve changing at Vienna. But it’s only a half-hour drive from Dubrovnik in Croatia where flights from Gatwick cost £156 return.
Advantages Montenegro is undergoing reforms designed to bring economic growth and foreign investment.
Disadvantages Unstable past, poor infrastructure and lack of budget airline access means it compares unfavourably with some other destinations.
- Ivanhoe Cambridge enters Brazilian real estate market with Ancar Gestao stake
- Nordic Real-Estate Market Sizzles (NY Times)
- From Cape Verde to Borneo, developers push into new areas (IHT)
- Hungary crisis a worry to Investors (Irish Independent)