Azure Overseas Property Investment Hotspots for 2012
Posted On: 20/12/2011
The year gone past has been a funny one for the overseas property industry, markets tipped to do well have flopped, and many markets have taken the world by storm and surprise at the same time.
You would be forgiven for thinking that this makes 2012 more difficult to make predictions on, and you are right and wrong; the Eurozone crisis could yet go any number of ways, and there are a number of other variables (will those who vetoed the new treaty be isolated, will the US finally recover) so 2012 is never going to be easy to predict, but on the other hand these predictions are not investment instructions, they are simply people's predictions on markets worth watching in the year ahead -- here's mine.
Turkey - Istanbul
Usually I would have just put Turkey, but you can't buy property in Turkey, you must buy on a street, in a district in a town and so forth, so as Turkish cities are vast and varied, it is much better to recommend based on them.
With Europe crumbling, Turkey is standing out as an investment safe haven, with a stable government, stable and rapidly growing economy, low public debt, and little exposure to PIIGs debts. Turkey's big problem has always been unemployment but that is also on the decline and is now well into single figures. The current account and trade deficit are now Turkey's main concerns, but with exports and FDI rising exponentially these are closing fast. Rising private debt and inflation are creeping up, but the government has earned our faith in that it can bring these under control softly as well.
Within all that safe-haven goodness is Istanbul, where developers simply can't build fast enough to meet the demand. Turkey's population is among the fastest growing in Europe in affluence and in number, and within that Istanbul is the fastest growing city. It is estimated that of the 512,000 homes needed in Turkey by 2015, 250,000 of them will be needed in Istanbul. This demand for property to rent and buy, as it continues to outstrip supply makes Istanbul an investment favourite for 2012.
Thailand - Pattaya
Most of the property markets in Asia enjoyed booms while the rest of the world went bust, but not Thailand. That was seen as a curse at the time but praised as a gift now. Now we know that those markets like Singapore seeing 20% month on month price growth, and setting new records for most expensive property each week were undoubtedly hyper-inflating bubbles or inflating bubbles at a hyperactive rate, whichever you want to call it.
Thailand had a back seat in all this, and now, much like Turkey it is propelling out of the downturn as fresh as a daisy. The IMF is predicting steady growth in Thai GDP over the next 2 years, with 3.5% forecast for this year, and 4% forecast for 2012. This is built on a solid base.
The Thai population is growing rapidly in affluence and numbers, and this is creating incredible demand for property to buy and rent. Bangkok central is still too pricey for most working-middle class Thais, so they are looking to new districts and places like Pattaya, where prices are still low. Prices are low by western standards, so foreigners are investing in properties in the city, to rent out to locals for a strong rental yield. Some however, are buying to move into the area, because they see the exceptional job opportunities in emerging Thailand cities, combined with low living costs and high quality of life.
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