Experts are predicting that property market in the Silicon Valley area or in West Los Angeles will be one of the earliest areas to experience price rises simply because of the number of high income people who live there. The city of San Francisco, Malibu, La Jolla and Palo Alto are also places where prices are anticipated to return to their peak within the next five years.

The lower end of the market has already experienced more interest, and now that is spreading to the middle market which should increase stability. Much of this is due to increased affordability, although the market is still being held back by high unemployment levels.

The threat of rising interest rates may force more buyers into the market as they will be worried about losing the opportunity to fix rates. As the economy recovers with more jobs being created and better job stability, and as financing for mortgages returns, the current affordability of housing will seem even more attractive.

During the last couple of years many investors have made substantial capital gains by buying foreclosed homes, and although the recovery is still relatively slow-moving the opportunity to find a bargain may be diminishing.

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.

(Read full entry…)

I thought it was only right that I should write one for my own blog, and so I am undertaking the arduous task of charting my ultimate top 5 property investments for 2009 and 2010.

Egypt:

I have recently fallen in love with Egypt, and it is my hot tip of the day (the one I tell my friends and relatives to go for if they ask me). For the price of a mid-range saloon I could buy a luxury apartment in Hurghada, one of Egypt’s fastest rising tourism destinations.

Hurghada is doing a roaring tourism trade at the moment, especially with Brits, who, keen to holiday outside the Eurozone are finding the low living costs in Hurghada an additional draw.

Property is so cheap in Hurghada because it is still in a very early stage of its development, with more developments in progress than useable holiday accommodation. There is a risk factor in that, as well as the risk factor for buying property off plan. But if you do your research carefully including several trips to the development then all those risks become benefits.

You are buying in cheap because you are buying into a building site, the value of the investment when it is a luxurious apartment on a world-class resort in a popular tourism destination is impossible to say accurately, but it will certainly be a lot more than the 12,000 – 20,000 GBP that you can buy in for now.

Egypt property is a versatile investment choice, because you can buy in with the hope of making short-term profit when more of the resorts are completed than not, but if that doesn’t pan out the profit will still come over the long-term.

The Philippines

I really am favouring countries that have shown their ability to grow economically this year; kind of like: if your (emerging market) economy can keep its head (of steam) while all those about you are losing theirs…

The Philippines is expected to grow by over 4% this year according to the International Monetary Fund, and unlike some of the economies expected to grow this year based on bumper crops that could be regarded as unreliable, the Philippines growth is based on the comparably solid worker remittances from overseas Filipinos, and on the outsourcing fuelled services sector.

Another benefit the Philippines has from an overseas investor’s perspective is its being worst affected by the Asian economic crisis at the turn of this century. This led to reforms in the banking sector which are neither here nor there in honesty, but it also led to Philippines property and commodity prices being lower compared even to its neighbouring competitors.

On top of that you have the fact that the capital Manila is a city emerging into a modern metropolitan wonder faster than most, and this means bargains in the form of off plan apartment complexes. I know for a fact that £30 grand will buy you a luxury apartment in a Manila high-rise, and in the growing financial district of Makati. As Manila’s middle class grows these properties will be in high demand, first for residential letting, and then for purchase.

Albania

I can help it, I just love Albania. Don’t get me wrong, its economy is likely to avoid the recession this year by only the skin of its teeth with a 1% growth forecast by the International Monetary Fund, and you won’t find 12% guaranteed rental yields in Albania. That said, Albania’s government is one of the most economically astute in the developing Eastern Bloc, having brought a quarter of its population out of poverty in the last decade and become a middle-income country in 2007.

Even now as most of the world is pulling in its purse-strings, the Albanian government is investing in future growth; using its new status to secure loans from the Japanese government, the European Bank for Reconstruction and Development for projects like a new terminal at the country’s largest port Duress, and a new super-highway linking the hills of Kosovo to the improved port.

Again the low price of property is not a downside in Albania; you can get a 2 bedroom luxury apartment in Tirana for just the wrong side of £50k if you know where to look. The good thing is that in Albania’s case the developments are not all resorts; many of them are suitable for the local population. This means that you can resell to Albanian’s who will be looking to buy property in increasing numbers as the economy continues to grow.

However, Albania property is very much a long-term investment; I have no doubt that in time the property being bought off plan now for £50k, will be resold for 3 times that amount, but this will only be when the local population can afford to pay that for quality housing, which may be 10, 15 or maybe even 20 years down the line

Panama

I just wrote a long article detailing why Panama property is one of my investment tips for 2009, rather than repeat or rewrite it you can read it by clicking the link above.

Repossessed Property in Developed Markets

The international economic crisis has led to hundreds of thousands of homes being repossessed around the world. For me the three main investment hot-spots where repossessed property is in abundance are: the UK, Florida (and the US) and Spain.

Many people are seeing this as an opportunity to buy cheap property, but that is not the way I recommend capitalising on it. I think people should spend the amount of money they would have spent, and use it to buy the ultimate repossessed property that they could buy.

For instance: if you are looking at Florida or Spain, then go for coastal property or property near Disneyworld in the former. But most of all buy a big property with plenty of land, especially in Spain, because this will prevent developments from springing up all around you. And in the UK it’s all about location, location, location; look for swanky up-market properties near the best schools.