Volume 39, Number 07
Travel
A House in the Sun
Top Spots to Buy Property Abroad.
by Marie Teather
These days, more and more people are attracted by the idea of buying homes abroad. Whether as a holiday home, to let, to renovate, or even to pack up and move to, buying property overseas can be a worthy investment. Choosing a location can, however, present some quandaries and so here Weekender looks at four global locations that are tipped to be profitable purchases.
Portugal
Nestled against Spain and facing out onto the Atlantic Ocean, Portugal has gone a long way to dispel a reputation of being the poorer neighbour. These days prestigious golf courses and the 300-plus days of sunshine every year, have long been attracting European tourists, and now, make it an appealing location for property buyers.
The market here is certainly favorable for a second home; with a low cost of living and property prices that have continued to grow 10–15% since 2000. In the ever popular southern region of the Algarve, apartment can be found for $140,000 and a studio in the up and coming resort of Tavira will set you back just $100,000. Further up on the Silver Coast, you’ll find atmospheric little towns and villages and as tourism is still yet to have an impact, properties go for a fraction of the cost in the south.
Portugal also remains one of Europe’s most inheritance tax-friendly states within Europe, ensuring that immediate family members will not have to pay any death duties on inheritance of property owned in Portugal.
Dubai
Currently 15% of the world’s cranes are in Dubai and you only have to turn on the news to hear of the latest record-breaking construction underway. This is the fastest growing city in the world, and still a great time to bag a property in the land where business trips and sports events will soon become eminent.
With no formal purchase process, and little or no taxes, the benefits speak for themselves. For properties built since 2002, capital gains of 30% per annum have already been reported. Many of the off-plan apartments and villas that speculators snapped up are planned to be sold even before completion and others plan to let their properties to tourists or short-stay residents, showing you just some of the ways you can make a property in Dubai work for you.
Properties still comes cheap though. Apartments can be found for $70,000 and villas for $160,000 unless of course you plan to buy on the scale that David Beckham and other celebrities have. For his Dubai investment, he coughed up $10 million.
South Africa
South Africa is a country quietly on the up, averaging a 4.1% GDP growth since the year 2000. In 2010 South Africa will be the host nation to the soccer World Cup and with interest rates at their lowest since the 1980s, buying property here has never been more promising.
In Cape Town’s central business district up to 3,000 new apartments have been built in the last two years. Capital growth in the city has been 35% per annum for the last three years, and prices are predicted to rise at a massive 20% a year in the next five years. At the stylish Mandela Rhodes Place, a new complex with restaurants, wineries, etc., an apartment (with rental pool) goes for around $200,000.
Up north, too-good-to-be-true stories of capital growth are also heard of near Durban in the region of KwaZulu-Natal. A new airport is scheduled to be built for the World Cup and with great weather, game reserves nearby and a reasonable standard of living; this area is also rapidly expanding. An ‘average’ sized house of 200 sq. meter will set you back just $115,000.
India
Like all things in India at the moment, the real estate market is booming. Following a move by the Indian government to relax rules on foreign investment in the construction industry, and mortgage lending having been made more accessible to the emerging middle classes of India; residential properties are driving a property boom.
City centre properties do not come cheap however. In Mumbai, apartments are priced at over $9,000 per square meter and in New Delhi $3,000 per square meter. Many Indians are instead taking their cash away from overpriced city centers and heading south. Here they are contributing to a rise in satellite towns and an increasing population of suburban dwellers. For investors looking for a house in the sun, the western coastline, which includes Goa, is home to tropical beaches and a cheap cost of living. An apartment here will set you back $80,000 and for a villa, upwards of $115,000.
Buying property here does take a degree of patience as foreigners of non-Indian descent cannot own property whilst on a tourist visa nor without permission from the Reserve Bank of India.