Best locations for property investment in 2011
Thursday 18th November 2010
As 2010 draws to a close, attention is turning to the best locations to invest in property in 2011.
The last year has been one of mixed fortunes with traditional second home destinations such as Spain, Italy and Greece still feeling the harsh effects of the economic downturn whilst other mostly non-euro zone countries such as Brazil, Turkey and Egypt flourished.
Overall levels of property investment rose in 2010 compared to 2009 with savvy investors capitalising on the bargains available as the property cycle reached bottom. Below market value residential developments such as those in Florida sold quickly as did properties with rental guarantees and finance packages as buyers sought security and minimal monetary exposure.
This more cautious approach to purchasing property is set to remain throughout 2011 so where is the best place to invest in safe, secure and high yielding property in 2011?
Here, experts at property agents Experience International, offer their top locations to invest in 2011:
"Familiarity with the domestic market and buying procedures should make many, especially first-time buyers, confident about investing at home in 2011," said Steve Worboys, MD of Experience International.
And rightly so, property prices have indeed fallen quite considerably in recent times but the old adage of location, location, location still rings true. The capital cities of London and Edinburgh have seen prices remain stable and even grow by up to 9.9% in the last quarter (compared to Q3 2009) in line with positive quarter on quarter GDP growth nationally.
Alternative asset classes such as hotel rooms in these city centre locations will prove the most lucrative investments in 2011. London's hotel market leads the way in Europe with an 8.5% growth in revPAR (revenue per available room) recorded in Q2 2010 according to Deloitte's Hotel Market Outlook report.
With increasing numbers of Middle Eastern and Asian investors eyeing up prime London hotels, UK investors should move quickly to secure double digit returns such as those offered at the new Holiday Inn West India Dock Road. Available 19% below independent RICS valuations and fully managed & operated by global hotel brand, Holiday Inn, rooms in the 4* hotel are selling fast from £189,000.
The South American BRIC nation secured its position as an economic success story in 2010 with ex-President Lula da Silva leaving a legacy of progressive fiscal policies, a rising middle class and a GDP growth rate forecast at an impressive 7.5% for 2010 according to the latest IMF World Economic Outlook report, considerably higher than the global average of 4.8%.
Entering 2011 in the hands of Da Silva's successor, Dilma Rousseff, optimism remains high for continued economic prosperity and societal development.
The future is happening now in Brazil with the rising middle classes driving demand for affordable social housing throughout the country as well as international buyers propelling the second home market, especially in the north eastern states. Leading holiday rental site, HomeAway.co.uk, reported a 71% increase in booking enquiries for Brazil during Q2 2010 and a number of new residential developments such as Tambaba Country Club Resort in Paraiba and Caponga Beach Village near Fortaleza are commencing construction to meet buyer demands.
Further south, Brazil's second city, Rio de Janeiro, is tipped as a property hotspot in 2011. The R$ 8 billion regeneration project known as Morar Carioca, will see vast improvements in infrastructure and modernisation of housing by 2020 in the metropolitan regions of the city including Copacabana, Leblon and Maracanã. In addition the R$ 34billion bullet train connecting Sao Paulo to Rio has been given the green light with the contractor expected to be announced shortly.
The discovery of the Libra oil field just off the coast of Rio also spells good news for investors as up to 15 billion barrels of oil could be extracted making Brazil's one of the world's top 10 oil producers.
From BRICS to CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa), Turkey has, despite not yet being an EU member, emerged as the shining star of Europe in 2010 - as tipped by the experts at Experience International 12 months ago.
Worboys said: "From an investment perspective, the economic powerhouse of Turkey, Istanbul, remains the best bet for 2011 with the city where east meets west presenting a rare window of real estate opportunity where demand vastly exceeds supply with over 250,000 housing units required each year."
One of the fastest growing megacities in the world, the population of Istanbul is set to reach 15 million by 2023 (Turkish Statistics Institute) placing massive pressure on existing housing stocks. In response the "City of the Future" as Istanbul has been heralded by National Geographic, is seeing the development of modern western style homes in the burgeoning suburbs such as Beylikduzu on the European side of the city.
Highly popular with Istanbulites, Beylikduzu has seen rapid growth and infrastructure investment in recent years with the Tourium shopping centre opening in 2010 (expected to attract 1 million visitors per month), the new Metrobus line connecting the suburb to the city centre set for constructed in 2011 and Turkey's largest airport at Silivri, in the next district, given the go ahead by the city's Mayor.
Property prices in the city are steadily rising as the market establishes itself however high quality apartments in prime locations such as Crystal Heights in Beylikduzu remain affordable from £68,000 with a 2 year 7% rental guarantee and 70% finance available.
One to watch - Morocco
One of the hottest property markets of the last decade, not just in terms of climate but investment potential - Morocco - may well be one to watch in 2011.
As part of the Plan Azur, Morocco witnessed a significant property boom especially along the Atlantic and Mediterranean coasts which ticked many of the boxes as Spain in the early 1970s namely year-round sunshine and a low cost of living.
The North African nation has seen resurgence in visitor interest over the last 12 months with HomeAway.co.uk recording a 55% increase in booking enquiries this year with average weekly rates for two and three bedroom properties at £452 and, respectively, £746.
Some 10 million tourists are set to visit Morocco in 2010, an impressive 14% growth compared to 2009. Tourism revenues of 56 million dirhams are expected with the sector accounting for 10% of GDP which is forecast to increase by 4.5% by the end of 2010.
With BA announcing new thrice weekly flights from London Gatwick to Marrakech and the new Mandarin Oriental opening in 2011, a city centre purchase may well be a shrewd investment.
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