Which countries are currently the best place to invest in real estate?

For a conservative investor

Austria

Very stable property market with a steady increase of the property prices of around 3% per year even during the real estate crisis since 2008. There is no reason to expect a downturn in the future due to a very stable political and business environment and an ongoing demand for properties in the Alps from local and foreign investors. Furthermore, due to a very stable incomming tourism market, a property owner has a possibility of making very nice rental incomes of upto around 7% per year (rental income of properties in the Alps). Which means all together a return on investment at around 10% per year.

Switzerland

Similar to the Austrian market – a very stable one with lower but continuous appreciation of properties. The year to year change of proprtey prices in Switzerland (2010 – 2011) was plus 4,9%. Besides, the Swiss people have voted in a very recent referendum to prohibit the construction of new second homes which comes into force from 1st January 2013. Buying a second home this year should bring an increaed value of property in the future.

France

France is a number 1 destion of tourist arrivals in the world. 10 milion tourists comming to French Riviera every year. Foreigners are making 50% of tourists in French Riviera. High tourism level gives a good chance or rental incomes in popular tourist destinations, such as Paris, Cannes or Nice. Guaranteed rental incomes of upto around 4,5% per year are possible to achieve with a very low risk.

However, the property prices are very volatile in France. Despite the overall fall in prices between 2007-11, against the expectations of many, there was strong sales and house price growth in 2011. House prices rose by 3 to 6% (according to different statistics). The price growth in 2011 was mainly as a consequence of historically low interest rates and a bounce back from three previous lacklustre years, when house prices fell or remained unchanged. In 2008 prices fell by 4.9% with a similar fall in 2009 (-5%), while in 2010 prices remained relatively static (+0.6%). Taking into account the above, the French property market can be recommended to investors, who are primarily expecting a guaranteed rental income with low risk. Focusing the investment on popular tourist destinations like Paris or French Riviera will help to increase or keep the property value.

For a dynamic investor

USA

Warren Buffet, America´s most famous stock market investor, has said he would buy US residential property over shares, as new figures suggest house prices in the US have bottomed out and the market looks to recover. The US property prices fell down by 33% since the peak in 2006 – hitting a record low in November 2011. Since the beginning of 2012 there have been signs of recovery due to increase of building permits, new housing construction and level of sales. Most indicators show that the US property prices are undervalued compared with rents (by 10%) and disposable incomes (by 23,6%). However, gains in prices probably will not be seen until 2014. In the meantime, property owners can benefit from very favourable rental incomes of upto 16% per year. This very high rental income can be achieved through investing in distressed properties sold by banks for low selling prices starting from about 50.000 USD. Furtermore, in some cases, the rental income is backed-up by an official US Department of Housing and Urban Development program (HUD), which gives more security to the property owners in terms of collecting their rental incomes.

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