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Investing in Property: Established or Emerging Market?

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There is currently a lot of doubt over the future of the emerging property market. A while back when talk of the credit crunch first began, there were reports that people were increasingly investing in established markets like Germany. Currently some people who are knowledgeable in the field are advising that most of the money invested in the foreseeable future will go into established markets. Recent research, however, shows otherwise.

Investment property portal The Move Channel has just revealed that most of its visitors are buying in emerging markets. The countries listed as most popular were Brazil, Dubai, Egypt, the U.S., and Turkey.

As I wrote in a recent article, the popularity of a country with buyers is not a good indication of a market’s potential. This is because most people are buying a holiday home with a view to letting it out when not in use, so the potential for rental income and capital appreciation is of secondary or possibly equal importance to where they want to take their holidays.

As far as I’m concerned, the top ten property investment hot-spots in the world for 2008 are Brazil, Cambodia (Phnom Penh), Philippines(Manila), Canada, Argentina, Costa Rica, Thailand’s island: Koh Samui, Thailand’s island: Koh Phangan, Malaysia, and Albania. I am not saying that every potential investor should buy in one of my top ten countries or avoid the established markets where possible because that would be foolish. What I am saying is that where you should buy your property depends on what type of purchase you are making.

If you are looking for a stable income from rental, possibly to approach a bank with for some buy-to-let finance, then you will want it be as risk free as possible. For these investors, established markets may prove a little bit better because their rental market has a proven track record. Germany’s Berlin is especially good for those who want to approach buy-to-let financing because of the housing demand exceeding the supply, giving way to a strong residential rental market.

On the other hand, some of the really strong emerging markets have properties with strong guaranteed yields, which is equally as good to take to the bank. Some emerging centres for business, like the Philippines’ Manila and Cambodia’s Phnom Penh, make equally good or even better investment locations for those in the market for strong rental income because they have the potential for residential lets with yields as high or almost as high as holiday lets from the rich executives relocating to head up the new branches of global corporations.

In covering only one type of buyer, I have shown how variables can affect where you buy, and that it is impossible to say: “You should buy here if you want that.” That is again why The Move Channel’s data is flawed. The Move Channel is a portal. There is a shortage of impartial information on the markets and a whole lot of advertising material and propaganda.

I would advise any potential investor to choose their top five locations based on reading as much impartial information and independent market reports as they can lay their hands on — before they even start looking at properties — and to also decide their exact budget and exactly what they need from a property (how many bedrooms, ground floor if they intend their elderly relatives to join them on holiday).

In short, to fix, or at least narrow the range of as many variables as possible entering the potential abyss of properties currently on the overseas property market.

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About Liam Bailey

  • Props

    I agree that there are emerging markets around the globe and these can represent opportunities, but if you’re inexperienced in buying property in other countries you should do you research and be wary. I think if you look carefully, you can probably find emerging property markets in your own country and therefore invest with less risk.


  • I’m interested in investing in properties throughout the world. I live in australia, but every time a property is purchased here, I am hit with stamp duty which is a very large government tax – I can often pay $50,000 just in tax for one property. This is needless to say unfair, and it substantially reduces profits. I would therefore like to buy property offshore where the tax is at least reasonable. I am a professional roulette system player so I travel extensively and can visit any country. What countries jurisdictions are best for property investing? Rather than pay my solicitor a fortune to determine this, perhaps someone can help me for free. Anyone with any appropriate advice of information can contact me through my site or email me. thanks.

  • Yes you are right investing in property will give huge profits within a short duration, when it is done in a proper manner.