1 Brazil:

We all know that I was right about this one. The only thing I was wrong about was that the Brazilian economy wouldn’t see any contraction during the downturn, because, — I believed — continued growth in Asia’s emerging markets would continue to fuel growth in Brazil. The Brazilian economy contracted by 5% in a very short space of time, starting from the end of 2008, but it has also enjoyed one of the fastest recoveries.

The contraction was like a very small blip compared to Brazil’s massive growth in the last few years. Recently reports have highlighted the fact that rising affluence has led to Brazil’s middle class being some 91million strong — a large proportion of the population. There are already signs of foreign investors flocking to capitalise on this massive growth in demand for affordable housing in Brazil. Then you have Brazil as a the World Cup host in 2014, and the Olympic host in 2016, both of which will increase tourism, affluence and bring increased sales and prices in the luxury sector. A resounding pat on the back there then.

2: Cambodia

Cambodia has suffered massively during the credit crunch. It was always a high-risk investment, and so the minute risk-appetite started to wean, sales of Cambodian property to foreigners dried up almost completely. At the same time the banking industry was hit hard, and so was the wider economy with the massive drop in demand for Cambodia’s key exports such as textiles and a massive drop in tourism. While I still think Cambodian property has bags of investment potential, my assertions of growth in the short term were badly mistaken.

3: Philippines

During the global financial meltdown the Philippines’ economy has continued to grow strongly, fuelled mainly by continued growth in outsourcing and worker remittances. Internal demand for property has remained strong, and it has benefited from resurgence in foreign demand from the second half of last year. That’s another back-slap I think.

4: Canada

Canada’s housing market has enjoyed a massive rebound throughout 2009, and in fact the government, which just months early acted to stimulate the market, was forced to look at measures to cool it.

This happened in several places around the world, because of a liquidity surge brought on by government stimulus into an economy that never crashed as bad as was expected and was seen in the worst hit parts of the world. Therefore anyone who invested in Canada property when I recommended it in 2008, is probably either sitting even and hoping the growth continues, or a little up and hoping the growth continues.

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The Times ran a particularly sombre piece on the three family members who had each paid a down-payment of 30,000 Euros, and were now as disappointed by the fact that they will never get the property in Brazil they had dreamed of, and because they are left severley out of pocket.

But all those people who are now very upset and out of pocket could have saved themselves all this misery by carrying out their own lengths of due-diligence before putting their hands in their pockets.

You hear of people all the time putting their money down before they have even been to the country. Most of the time this goes just fine and the people end up with the keys to their new apartment or villa and a smile on their face, but then there are the 1% that don’t and this can give the industry a bad reputation.

I always advise the people with whom we discuss an overseas property purchase off plan to go out and do some research on the development and the developer, here are some of the things you should research:

1. Make sure they have all the necessary titles and planning permissions

   This is a hurdle that often leads to disappointment when planning permission falls through at the last minute, and it is also one of the easiest to research; a trip to the local land registry, or planning office will gain you the relevant information.

2. Check the developers track record and financial status

   Ideally you should be buying from a developer with a proven track record of successful developments. This might seem a little harsh, but it is the best indicator of the developer’s intentions and quality. If it is the developer’s first but you really want to buy that property, then either wait till the development is completed, or make sure you check the developer’s financial status thoroughly; you want to make sure that they have all finance for building work in place, and that they are not reliant in any way on off plan sales to fund work on the development.

3. Make multiple trips to check progress

   After your initial fact-finding trip you should aim to make a trip to the country, before each of the stepped payments

Another key thing to remember when it comes to buying off plan property, is that, to a certain extent you are in the driving seat so negotiate payment terms that are favourable to you, so that you are not paying out a great deal of money until the development can be walked around inside.

Off plan property is potentially one of the most lucrative investments you can make, because you are getting an automatic discount off market value, and when the work is complete it will be a swanky new property with all mod-cons. If you do all these things then you can minimise the risk of an off plan property purchase, and reap maximum reward.

Post written by Liam Bailey for Azure Overseas, specialists in cheap property abroad