Nick Gibbens Bulgaria has been judged the best overseas property investment market in the Assetz March Property Investment Tracker index, despite a predicted slowdown in house price growth in the coming year. The Property Investment Tracker rates the return on investment, weighed against a variety of issues in countries relevant to UK property investors, recently expanding its remit to include South Africa, Portugal, Poland, Turkey, Italy and Greece. Despite Bulgaria's likely slow down in house price growth over the next year, it remains the strongest investment prospect, said the group. With a minimal deposit of only 30 per cent, along with excellent yields of 12 per cent, Bulgaria offers significant returns of 116 per cent on a small initial outlay. According to the property investment company, the average two-bedroom apartment in Bulgaria now costs about £80,000. Cyprus is not far behind says Assetz, with prices in southern Cyprus rising by about 15 per cent in 2005, and expected to rise further ahead of the islands accession to the euro in 2007/2008. Rental yields remain at a confident eight per cent with a year-round rental market in some parts of the island, accumulating a total 84 per cent return on investment. Turkey, a new addition to the Tracker, will present a new overseas opportunity for investors who are awaiting a change in legislation to allow mortgages for foreign investors, expected later this year, say Assetz. Growth in South Africa has slowed from 24.6 per cent to 15.8 per cent and is likely to continue falling. Mortgage rates, already 8.5 per cent are rising, prompting serious concern over the stability of the market. Yields have fallen from 10 per cent to as low as 5 per cent in 2005, so rental income will fail to make a profit for many investors.
Stuart Law, managing director of Assetz, said: "Overseas markets are still offering excellent opportunities for investors, with Bulgaria and Cyprus now overtaking some of the more established destinations in terms of total return on cash invested. "However, investors should remember that high return is often associated with higher risk. Established locations such as France are still holding up extremely well against the competition. "Cheap Bulgarian ski destinations are certainly in as much demand as quality resorts in the France Alps. However, for sunny destinations combined with quality investment returns I prefer the South of France and Southern Cyprus to the coastal resorts in Bulgaria.
"Property in America is in a very tense state at present with conflicting statistics showing resilient existing home sales but collapsing new build sales volumes. The jury is still out on how safe it is to be investing in the States right now." Stuart Law, Assetz: "Overseas markets are still offering excellent opportunities for investors, with Bulgaria and Cyprus now overtaking some of the more established destinations."Although gains are still strong, with 27 per cent capital growth and 8 per cent yield, the change of rules concerning borrowing will have a dramatic effect on the housing market, potentially pushing up prices in key areas as much as 50 per cent in one year, the group added. http://www.999today.com(27.03.2006)