The uncertainty in the U.S. and in the Eurozone, traditionally seen as the most stable regions in the world, means that the best investment options may well be outside these traditional destinations.
However, even when buying outside the Eurozone and the United States, the most sustainable strategy is to invest in the best. The importance of quality and differentiation has never been more apparent. Only the very best locations, developments and brands will prosper.
Astute property investors found opportunities last year, and as always, they will continue to do so in 2012. Here are a few of the places they may be looking at.
Retaining an aura of prestige, Barbados enjoys an enviable international reputation for its outstanding record of social, economic and political stability. Barbados’ parliamentary system has been in existence since 1639, making it the 3rd oldest parliament in the British Commonwealth. Also, the country’s freedom from corruption rates high – Transparency International’s Corruption Perception Index 2010 ranks Barbados as 2nd in the Americas and 17th among 178 countries. Strong, stable and secure, the Barbados dollar has been pegged to the U.S. dollar at 1.98 to 1 since 1975.
Barbados enjoys a positive image in the marketplace as a reputable International Business Centre of choice and has been successfully attracting Foreign Direct Investment for decades, particularly from Canada and the United States. The country is the 3rd leading destination for Canadian direct investment abroad, garnering CAD$51.7 billion of direct investment by the end of 2010.
With daily flights from the U.K., the U.S. and Canada, Barbados is easily accessible by air, attracting an increasing number of holidaymakers, buy-to-let investors and second-home buyers. With its temperate climate, endless beaches, colourful culture and friendly people, it is little wonder Barbados has an ever-expanding real estate industry.
There are no restrictions on foreigners purchasing property in Barbados, but non-residents need to ensure that all of the funds for purchase are derived from external sources. There is no capital gains tax, inheritance tax or gift tax on Barbados.
Being one of the most accessible islands in the Indian Ocean, Mauritius has not only established itself as a luxury holiday destination, it is also starting to gain a good name among property investors worldwide, as the island is open to foreign buyers thanks to the government-backed Integrated Resort Scheme (IRS).
Long a favourite with holidaymakers and A-listers, Mauritius is perfect for those who enjoy unspoilt beaches and charming villages that dot the Indian Ocean idyll. But it is also an appealing option for active visitors, with diving, hiking, watersports and 6 championship golf courses on offer.
There are financial perks, too. Foreigners can only buy property through the IRS on government-approved high-end resorts and in return receive automatic Mauritian residency and benefit from the island’s low taxes: 15% income tax, minimal capital gains tax and no inheritance tax.
Mauritius is a politically and economically stable country, with a strong financial and offshore sector, modern and reliable IT and telecommunications infrastructure, and a comprehensive legal framework, which makes the island highly attractive as a world-class investment destination. Mauritius currently scores in the Top 2 for all 53 African countries in terms of the World Bank’s rankings for personal security, investment, business and rule of law. Mauritius’ GDP has grown faster than 5% annually for almost 30 years.
With its booming economy, stable political system, a wonderful climate year-round, spectacular scenery and beaches, excellent international travel links and high levels of personal security, Mauritius is now widely recognised as one of the world’s most desirable destinations to live, ranking at the top of numerous global polls.
Voted the world’s most beautiful island, with 19,000 acres of rainforest and an array of outstanding beaches, St. Lucia rivals the more established Caribbean destinations. Surrounded by dazzling blue sea, St. Lucia also boasts one of the newest UNESCO World Heritage Sites, the Piton Mountains with their surrounding tropical rain forest. Annual tourism grew by 9% during 2010, and reached the highest number of arrivals ever.
St. Lucia has seen rapid development in the past few years, as the island’s infrastructure, social facilities and amenities have improved significantly in an effort to meet the demands of its tourism market. St. Lucia’s development is heavily regulated by the government to safeguard the island’s natural beauty, including protected rainforests, estuaries and marine reserves.
Economic and political stability, excellent health facilities and direct flights from New York, Miami, Philadelphia, Atlanta, Charlotte, Toronto, Montreal, Puerto Rico, London and Frankfurt means St. Lucia has a lot to offer both tourists and investors.
As an ongoing bonus for foreign buyers of property on St. Lucia, there’s no VAT, capital gains tax or inheritance tax, plus the government offers incentives for investors at various resort developments. There are no restrictions on what can be purchased in St. Lucia as a non-resident and all properties should have a registered title.
St. Lucia represents good value compared to some of its more developed neighbours and is fast emerging as the destination of choice for real estate investment, holiday home or retirement living.
St. Lucia’s beauty and lower prices make it ideal for property investment.
Situated at the heart of Europe, Switzerland is a world-class destination to live, holiday and invest.
Beautiful scenery, excellent transport system, excellent health and education services make Switzerland without a doubt one of the most attractive countries in the world to live and many celebrities and wealthy individuals have done so. They enjoy very attractive Swiss tax advantages, a high degree of privacy and personal security. Additionally, the political and economic stability of Switzerland makes it the ultimate place of residence.
In the past it has been difficult for foreigners to buy property in Switzerland. However, recent easing of restrictions has enabled more international buyers to acquire luxury properties. Certain areas of the main Cantons of Vaud, Valais, Fribourg, Bern, Neuchâtel, Ticino and Graubünden now permit overseas purchasers. Numbers of properties available to non-residents are limited, and each Canton is different when it comes to letting property arrangements.
Switzerland’s stable, strong economy and tightly controlled supply mean residential prices are less volatile than in many other international markets.
With one of the most attractive lifestyles in the world, Switzerland represents strong investment potential.
Investors looking for key opportunities to increase their portfolios should seriously consider buying property or land in Brazil, one of the world’s fastest-growing investment markets. Sovereign rating in Brazil was recently upgraded, proving Brazil’s status as an attractive haven for investment opportunities.
Brazil, with a population of 193.3 million, has overtaken the U.K. to become the world’s sixth-largest economy, according to economists at the Centre for Economics and Business Research, and the government is bolstering long-term GDP growth by increasing infrastructure investments.
It is one of the world’s top emerging markets, where the population is growing rapidly in both numbers and affluence. The past 8 years of centre/left government has resulted in a staggering 40% increase in GDP per capita, while a growing and more affluent middle class has resulted in increased consumption.
Brazil has been booming, thanks to its huge supply of natural resources, including base and precious metals, oil and gas, and agricultural products. It also has a stable economy, a low risk of serious threats such as war and terrorism, and a strong development policy. This is attracting a lot of foreign investment. With robust demand across the board, Brazilian property is enjoying excellent health.
Overall, the outlook is positive for Brazil. A GDP growth of close to 5% is expected through 2013, and preparations for the 2016 Olympic Games and 2014 FIFA World Cup are expected to generate more than $50 billion in new investment.
Boasting the perfect climate, stunning scenery, low cost of living and warm, friendly people, the country has all the ingredients for the perfect vacation home: white sand beaches, tropical islands, vibrant cosmopolitan cities and charming colonial towns dot its 7,500-kilometre-long coastline. Inland, Brazil’s tourist attractions include imposing waterfalls, wetlands filled with wildlife, and the untouched wilderness of the Amazon, the largest expanse of rainforest on the planet.
With all the right drivers for investment, especially property, Brazil has plenty of potential.
The Cayman Islands
Situated about 500 miles south of Miami, the economy of Cayman Islands – consisting of Grand Cayman, Cayman Brac and Little Cayman – is dominated by 2 pillars: International financial services and tourism.
The Cayman Islands is considered the 5th largest banking centre in the world. More than 9,000 mutual funds, 260 banks and 80,000 companies operate throughout the islands. It boasts the world’s 14th highest GDP per capita, and the highest standard of living in the Caribbean. These factors fuel the islands’ thriving real estate market.
One of the main factors that truly sets Cayman apart from most other Caribbean islands is that Cayman has no direct taxes, With no income tax, no capital gains tax, no property tax and no inheritance tax, the Cayman Islands offers an attractive investment, as well as the stability and security of British Commonwealth state status. There are no restrictions for non-residents looking to purchase real estate in Cayman. The Cayman Islands government guarantees title, which allows purchasers to invest with conﬁdence. Cayman has a modern land registry system, based on the Torrens system, making transfer simple and quick.
Tourism is a major industry, accounting for three-quarters of earnings. Each year, 1.5 million visitors experience the islands. Aside from the most beautiful white sandy beaches and turquoise waters, Cayman Islands is also best known for some of the most spectacular diving in the world.
Economic and social fundamentals of Cayman are strong, and the country will remain an overseas holiday home hotspot for the foreseeable future.
London, United Kingdom
Globally recognised as a leading financial centre, London is home to the 4th largest stock exchange in the world and according to U.K. Trade & Invest (UKTI), the U.K. is the most favoured location for companies to establish their European headquarters.
The London real estate market offers good investment prospects for property investors despite the Eurozone crisis. Throughout 2011 investors have increasingly viewed the London real estate market as a relatively safe haven for capital and the instability in other countries appears to have further boosted demand for property in Central London, particularly in the upper price echelons, and the market remains strong.
The number of foreign investors buying in London has climbed since 1960 and as U.K. owners tend to hold properties for less time than overseas investors, London’s property market is becoming increasingly international. Overseas investment into London real estate is running at £3.7 billion a year and at this rate, foreign buyers will own all residential property in Greater London by the middle of the next century, according to Savills. Within central London, foreign buyers accounted for 65% of all funds exchanged for properties valued at more than £5 million and for 34% of all London property transactions.
Most investment is channelled into high-value residential property areas such as Mayfair, Kensington, Notting Hill and Chelsea, although buyers of high-end properties are starting to spread into less central locations.
Property prices in some central London hotspots are set to more than double by 2016, driven by a mix of factors that include volatile financial markets and major new transport projects such as Crossrail – Europe’s largest infrastructure project – according to a report from estate agency Knight Frank.
As domestic and overseas buyers continue to flock to the security of the prime central London housing market, recognising the importance of a prime London property as a tangible asset within their portfolio, the rarity of supply will continue to support price growth. The investment case for prime London property remains compelling. Over the past 15 years prime London homes have outperformed growth in both the FTSE and MSCI indices, as well as eclipsing gold as an investment.
Canada offers beauty, variety and an enviable quality of life. With so much going for it, it is no wonder that Canada is a big hit among foreign property buyers.
The country has everything – from rugged mountain peaks, glaciers, waterfalls, rivers and soft sandy beaches, to a great variety of unique fauna such as grizzly bears, humpback whales and moose. Beyond its natural world, the Canadian realm has cosmopolitan cities and rich history, culture and tradition. With one of the longest ski seasons in the world and a wide and varied range of summer activities, Canada is truly a destination for any season.
Politically and economically stable, Canada presents few investment risks. Also underlying its appeal are low population density and a fabulous lifestyle. Canada has the best overall quality of life among the G7. The Economist Intelligence Unit (EIU) reports that Vancouver (1st), Toronto (4th) and Calgary (5th) rank among the top 5 cities in the world for liveability.
At US$1.57 trillion, in 2010 Canada was the world’s 9th largest economy as measured by Gross Domestic Product (GDP) at market exchange rates. Canada’s economy is larger than those of Russia, India and South Korea and rivals leading destinations of foreign direct investments.
Best-in-class financial regulations and strong balance sheets have helped Canada’s banks earn global recognition. While banks around the world collapsed and inter-bank transactions froze in the wake of the global financial crisis, not a single Canadian bank required a bailout.
The amount of investment coming to Canada demonstrates foreign investors’ confidence in the Canadian economy. Canada was the world’s 8th-largest recipient of FDI inflows between 2001 and 2010, attracting about US$36 billion a year over this period.
A robust domestic property market and an increasing expatriate community are coming together to create a steadily growing housing market that should make for reliable long-term investment. The Canadian property market is one of steady growth rather than spectacular gains, but there is a steady influx of professional tenants as the country’s popularity for immigration and retirement increases. Its growing reputation as a safe and politically neutral country is only likely to enhance this.
Canada has a mature, established economy that still offers investment potential in a relatively risk-free environment.
Panama is a favoured destination for retirees and expats looking for homes overseas, thanks to its favourable tax laws, beautiful weather and beaches, first-rate healthcare and growing economy.
For such a little country, Panama offers tremendous diversity and you can find almost any lifestyle you might be looking for, from cosmopolitan Panama City to Caribbean island hideaways, Pacific coast fishing villages, colonial cities, mountain towns and expat enclaves
But there is more. Panama has the world’s best discount programmes for retirees, called the pensionado. It offers 15-50% off everything, from public transportation to movies, mortgage rates, doctors’ visits, electricity, restaurants, hotels and airfares.
The country is fast growing as a popular tourist destination because of special features such as deep-sea fishing, tropical rainforests and river rafting. In addition, there are stunning beaches and wonderful opportunities for diving, kayaking and surfing. Panama is considered to be one of the best-kept “natural” secrets in the world: 40% of forests are protected areas and the country provides over 2% of the world’s oxygen. The nation is sanctuary to hundreds of species – many of them endemic. A total of 7 major indigenous groups continue to live traditionally in vast nature reserves.
The Tocumen Airport expansion is ongoing and total investment is over US$68 million. The airport, known as the Hub of the Americas, is home to Panama’s Copa Airlines, which will soon boast new aircraft and service to 7 new cities: Toronto, Nassau, Brasilia, Porto Alegre, Chicago, Cucuta and Asuncion.
According to the IMF, Panama has one of the fastest growing economies in Latin America. It is projected that real GDP growth will have exceeded 8.5% in 2011, thanks to the uninterrupted infrastructure investments, along with diversifying the economy. Analysts predict growth in 2012 to be somewhat slower at 7%, but still a figure that makes Panama’s economy look recession-proof and ripe for foreign investment.
Growth has been spurred by revitalized tourism, increased flights and port activities, along with strong commerce in the Colón Free Zone, Panama’s large trade area, and a major commercial distribution centre for the Latin America and Caribbean region.
The ongoing US$5.25 billion expansion of the Panama Canal, which began in 2007 and is expected to be completed in 2014, accounts for about 25% of GDP. The project will allow the canal to accommodate larger ships, creating 7,000 direct jobs and 35,000 indirect jobs in the complementary services sector and canal transit activities. The canal expansion will also increase Panama’s revenue from shipping tolls and exports. Annual trade growth is expected to be 11.6%.
The government also plans to invest billions in infrastructure to help boost growth. More than US$13 billion worth of infrastructure projects is planned, including the US$1.2 billion metro system, scheduled to open in 2014.
For those looking for a second home or retirement place, Panama should be at the top of the list.”
Thai property is popular with all types of real estate buyers and is set to increase in popularity as the country continues to invest heavily in its tourist infrastructure and economy. It is a vibrant, exotic, charming and exciting country that offers property investors good medium- to long-term potential.
With more than 14 million international arrivals, Thailand is one of the most popular destinations in Asia. It has one of the most active tourism industries in the world, and has become the gateway to the rest of the Asia-Pacific region and Indochina.
The country enjoys a diverse landscape. In the north are mountains and forests, whereas in the northeast are semi-arid farmlands. The Central Plains cradle the country’s vast rice fields, and in the south are Thailand’s famed tropical islands and its long coastline.
Popular destinations such as Phuket, Koh Samui and Pattaya are most in demand among second-home buyers and property investors.
Phuket is becoming known as the Asian Rivera. The region is consistently rated as one of the world’s greatest sailing, diving and golfing playgrounds, with its countless beaches and natural wonders to explore. Phuket has a broad range of first-class hospitals, restaurants, nightlife and shopping, with an international airport that offers a huge number of flights to many Asian gateways. In addition, up to 50 private jets arrive each week during the high season, as the international elite fly in and out of the island on an increasingly regular basis.
The island of Koh Samui has in the last decade attracted the attention of many foreigners who have decided to live or to invest. The beauty of the island, the classic tropical paradise, the hospitality of the people, moderate cost of living and, above all, the continuous development of the island have been the main drivers.
Samui is living a period of increasing and impressive development, like Pukhet years ago. Now Samui is quickly becoming known as the Pearl of the Gulf of Thailand. Just under an hour’s flight from Bangkok, the island is a perfect place to purchase a retirement or holiday home.
Pattaya is one of the most preferred retirement and second-home destinations in Thailand, attracting foreign and Thai investors. Pattaya’s strategic location will continue to be a key driver of growth in tourism and its property market. It is the closest beachside town to Bangkok, just over an hour’s drive from the capital, and offers an impressive range of 5-star amenities. Regarded as one of Asia’s top beach resorts, Pattaya is home to more than 30 international-standard golf courses, making it a tourist’s dream destination. These factors make Pattaya well positioned for further growth.
For savvy investors looking to get an early start on the next big thing, Koh Pha Ngan, Krabi and Koh Chang are all starting to attract major interest.
France never goes out of fashion
Although in the Eurozone, France remains a property hotspot. The country has much to offer visitors, expatriates and investors alike, and this factor creates a highly buoyant property market. Over the years, investment property in France has enjoyed success. Due to many natural and economic factors, France is still an ideal location for many of today’s wise property investors who seek a stable, though buoyant market in which to make their next purchase.
Tourism is a vital element of any property market and few countries can compete on the same level as France in attracting overseas visitors. Geographical diversity, natural and cultural attractions, combined with chic, cosmopolitan atmosphere and cities such as Paris, Nice and Cannes, are some of the driving factors. Add beautiful rural towns and villages, with that unmistakable French charm that continues to draw visitors, second-home buyers and expatriates.
The fact is that France is one of the most popular tourist destinations in the world and this is unlikely to change any time soon.
The Languedoc and Limousin regions are currently attracting greater interest than usual from buyers looking to benefit from a laid-back French lifestyle without having to pay the Provençal prices, along with the Green Perigord region to the north of the Dordogne.
The French enjoy the best quality of life in Europe, according to several surveys. The elements that have contributed most to France’s success include a lower retirement age, more days holiday per year, more hours of sunshine annually and more government spending on healthcare and education.
Capital appreciation, while not as high as in some emerging markets, is considered to be profitable and reliable within a stable investment climate. The French estate agent trade body, the French National Association of Immobiliers (FNAIM), has forecasted an increase in prices of 6% across France throughout 2011 and 2012, with the most popular areas, such as Paris and the French Riviera, forecasted to rise by as much as 15%.
‘Follow the smart money – Top property havens 2012′ property investment feature provided by Leading Luxury Real Estate, www.leadingluxuryrealestate.com