FLORIDA, Cape Town and Sofia in Bulgaria were the top performing residential markets last year, according to a new report from property firm Prestige. Prices rose by more than 20 per cent in these locations last year.
However, Prestige warned investors to shy away from the Costa Del Sol in Spain, where prices only rose four per cent last year. This was due to ongoing legal difficulties related to land ownership and rampant over-development.
Florida was the fastest growing residential market last year, soaring 27 per cent. However areas with the sharpest rises in prices could also be subject to the biggest falls, with the rampant Florida market seen by some doom merchants as an indicator of an unsustainable US property boom.
Bulgarian capital Sofia saw its residential housing market increase by 22 per cent in 2005, closely followed by the Western Algarve, which jumped 20 per cent. Property prices in Warsaw increased 18 per cent last year.
The increase in overseas house prices has been partially fuelled by pensioners spending their retirement abroad. Figures in the UK have shown that over 1m pensioners are drawing their state pensions abroad, up from 770,000 in 1997. The flow of investor cash abroad has also been hastened by falling or sluggish rental yields in the home markets.