Hello and welcome to the Someplace Else Ireland blog.
If any of our readers are thinking about attending this weekends Sunday Busines Post Expo in the RDS, we’d be absolutely delighted to meet with you. More details on opening times, our stand location and my emerging market seminars are below.
But back to business – last week some of you might remember that I spoke about the much stricter lending conditions Irish and UK property buyers are facing at home and how lending conditions in countries like Romania with much lower mortgage debts and booming economies are the complete opposite.
There is another category of countries I’d recommend investors study closely – those who don’t yet offer reasonable mortgage products to locals or foreigners but could be doing so in the very near future. If you can locate a market with a fast growing ecomony, low property ownership, relatively high but falling interest rates and a government that implements sensible fiscal policies then it is probably only a matter of time before affordable financing become available.
Can anybody remember what happened in the Baltics 4-5 years ago? Interest rates in the region fell from 12% to 4% enabling banks to offer mortgage products to hundreds of thousands of people who previously would never have been able to afford to buy a property with savings alone. The supply of new property more or less stayed the same while demand shot up dramatically. Result? Property prices increasing 30-40% per year. Someplace Else investors made a fortune because we were the first into the market.
Take a closer look at the much bigger and more powerful Brazil – banks don’t yet offer financing to foreigners but an economic boom and easier credit terms for locals have caused a “consumption frenzy” as millions of Brazilians qualify for loans for the first time. The people that are now taking out loans to buy new cars will eventually take them out to buy new houses.
Or take Argentina – ultra modern tower blocks are springing up all over Buenos Aires and the vast majority of them are snapped up by well heeled locals buying with cash. Think about that for a moment – there is a property boom in Argentina being driven not by overseas investors but by Argentineans buying with cash. When lower interest mortgages become available to Argentinean professionals who don’t have $150,000 in cash lying around, property prices will absolutely soar.
What I’m writing here will be nothing new to adventurous Irish investors, in the last three months alone I’ve met Irish people who own hundreds of city centre apartments and thousands of acres of land. I also spoke to a gentleman last week who is planning to buy 100,000 hectares in Bolivia.
Want to learn more about €60,000 apartments and land with planning permission for $11 per square metre? Just give us a call - 1890 425 425.
Best Regards
Colin Murphy
Director
Someplace Else Ireland Ltd
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2 comments:
Keep up the good work Colin, great to somebody writing useful articles that aren't glorified sales pitches.
Sean.
Brazil is such a big, so beautiful and progressive country, which reserves a powerful economy for a big opportunities investment. Brazil is a country of great challenges in the process of identification, financing, construction and administration of the countless necessary projects to its social development, political, economical and technological. Previously the economy in Brazil was a joke with the currency as volatile as the Turkish Lira once was and the entire nation over exposed to fluctuations in America’s fortunes. It was against this backdrop of financial insecurity that Brazil was attempting to win foreign direct investment into all sectors including the Brazil property market - and largely failing to get anything other than speculative, short term, damaging investment that took advantage of the nation’s unstable state. Following the election of President Lula da Silva the situation in Brazil has dramatically changed, at least in direct respect of the economy. For example, through economic diversification, productivity improvements, higher international commodity prices and overall economic reform, Brazil is now believed to be on the cusp of achieving investment-grade rating by the likes of Moody’s and Standard & Poor’s.
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