1. Bra$zil

The Brazilian property market has got a lot going for it. The country is attracting a lot of inward investment, has one of the world’s fastest-growing economies, a rapidly emerging mortgage market, a general shortage of quality homes, and has been selected to host the 2014 Football World Cup and 2016 Olympic Games. This will lead to the construction of new and improved infrastructures and homes across Brazil.

Property investors worldwide are flocking to Brazilian shores to snap up real estate in anticipation of future capital growth. Unique Press. One local expert projects Brazilian property prices could appreciate by up to 200% over the next decade, driven by the country’s burgeoning economy and the pending introduction of mortgages to overseas nationals.

Property Investments

Goldman Sachs believes that Brazil’s economic growth could outstrip that of the other BRIC (Brazil, Russia, India, and China) member nations over the next few years. Brazil’s economy is widely expected to become the fifth-largest in the world by the time the Olympic Games kicked off in 2016, and yet Brazil’s property and land prices remain a fraction of those found in more developed nations.

The Brazilian president, Luiz Inacio Lula da Silva, has already pledged to spend up to £11.5 billion on building a million new homes in Brazil between now and 2011. However, potential high property investment rewards are not without risks, as crime and corruption remain widespread in Brazil.

2. France

In stark contrast to the relatively high-risk, high-return nature of investing in Brazil, the risks associated with investing in French property are far lower. France has traditionally always been a rather haven for property investors. The nation was the first European country to come out of recession in 2009, reflecting that the global credit crunch had much less impact than other European counterparts.

France’s strong economy has positively impacted its property market, which now appears to be on the road to recovery. Increasing property and mortgage transactions are boosting residential values, with the latest FNAIM data revealing that the average price of a French property appreciated by 2.8% between April and September 2009.

Although average prices remain down 7.8% year-on-year, the market is generally expected to improve further due to France’s prudent attitude to mortgage lending. Anyone taking out a mortgage in France is usually only permitted to borrow one-third of their total gross monthly income. This has ensured that mortgages remain readily available, with 100% loan-to-value home loans available at competitive borrowing rates.

Consequently, mortgage lending in France is soaring. French mortgage broker Athena Mortgages reports a 21% rise in mortgage inquiries in Q3 2009 compared with the previous quarter. The buy-to-let and leaseback sectors are reportedly attracting particular interest from investors due to improved yields across the country. The capital city of Paris has long been identified as one of the most attractive European cities for investment. It is typically the most popular place to buy a home in France, along with Cannes, Marseille, and Nice, all located along the southern Mediterranean coast.

3. the USA

The USA property market may be showing tentative improvement following one of the worst economic and property crashes in living memory. Still, the downturn has come at a cost to many US homeowners.

Data from RealtyTrac shows that a record high of 938,000 US homes foreclosed in the third quarter of 2009. If this trend continues, foreclosures will reach around 3.5m by the end of 2009, up from about 2.3m properties last year.

Properties in Nevada had the highest foreclosure rates in Q3, followed by homes in Arizona, California, Florida, Idaho, Utah, Georgia, Michigan, Colorado, and Illinois.
Rising unemployment levels – currently at a 26-year high of 9.8% – were cited as the main reason for the increase in foreclosure levels. Yet, there may be worse, as the unemployment rate is not expected to peak until mid-2010.

Unfortunately, one person’s misfortune is another’s gain. With around 7m properties currently in the foreclosure process, compared with 1.3m for the same period in 2005, predatory investors are buying up distressed, abandoned, and repossessed homes at bargain-basement prices, as now appears to be the ideal time to fill your boots. Although the subprime mortgage crisis started in the USA, there are growing signs that the property market may now be at or near the bottom of the cyclical downturn. Various indices reveal that average residential prices started to rise, albeit marginally, during the second quarter of 2009.