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Prestige Group has released "The Index" an analysis of the current top-ten overseas residential hotspots, providing an incisive guide for investors who are thinking of buying foreign property. It comments on prices, rental yields, local legal systems, social and economic stability and the cost of finance. And, guess what? Taditional hotspots are OUT, whilst former eastern block countries are the rising stars.
The report's main highlights:
- Central Eastern Europe (CEE), particularly Sofia, Warsaw and Budapest, is becoming a solid residential hotspot with high appreciation and rental yields.
- Of places reviewed, Florida delivers the highest house price inflation.
- Cape Verde's growth is expected to continue with exceptional year-round rental yields.
- Dubai's oversupply of property means prices of apartments have fallen in real terms.
- Costa del Sol's investment potential is in the doldrums on the back of over-development with lowering appreciation and yields.
| Destinations | AVERAGE PRICE PER SQ.FT. | ANNUAL YIELD | ANNUAL PRICE APPRECIATION 2005 | PROSPECTIVE HOUSE PRICE APPRECIATION |
| Cape Town (South Africa) | £141 | 6% | 22% | Slowing |
| Cape Verde (Republic of) | £96 | 14% | 18% | Speeding Up |
| Costa del Sol (Spain) | £232 | 3.5% | 4% | Slowing |
| Dubai (U.A.E) | £110 | 7% | 0% | Standstill |
| Florida (US) | £167 | 8.3% | 27% | Slowing |
| Budapest (Hungary) | £133 | 7% | 20% | Slowing |
| Dublin (Ireland) | £331 | 3% | 10% | Slowing |
| Sofia (Bulgaria) | £86 | 6.5% | 22% | Speeding Up |
| Warsaw (Poland) | £108 | 9.5% | 18% | Speeding Up |
| Western Algarve (Portugal) | £183 | 3.8% | 20% | Speeding Up |
Paul Coghlan, Chairman of Prestige Group comments: "Investment in overseas property is moving away from the holiday homes' market and towards attainment of stronger appreciating property in the less traditional countries such as those in CEE. This move has seen Warsaw at the top of our first International Hotspots Thermometer."
"The market has been fuelled by interest from homeowners in the UK and Ireland who, seeing their own homes increase in value, wish to make equivalent gains in other emerging markets. Increasingly these residential property purchasers have clearer investment goals, making them much more calculated about their decisions.
Florida (in second place) remains a strong draw for investors and still offers growth opportunities. The exceptional returns of recent years are unlikely to continue in the long term, cautions the report. A recently weakened dollar also offers potential currency gains. The index also shows that the Western Algarve (in fourth place) is emerging to offer property investors excellent value while, the Central Algarve is increasingly overpriced.
"A traditional favourite - the Costa Del Sol - is likely to suffer in the near future due to overdevelopment and the resulting falls in appreciation and yield. Dubai's market is also overheated and somewhat over hyped so this could cause investors problems if they are not careful," adds Coghlan.
Prestige Group is headquartered in Dublin with regional offices in Galway, Belfast and Cork. It also has offices in the UK, USA, Hungary, Poland and Bulgaria. For further information call 1850 336666 or visit: http://www.theprestigegroup.com/
