Investors are enjoying the bigger yields on sovereign bonds, but these bigger yields reflect increasing risk. The longer these countries struggle the higher risk their debt becomes, the higher risk their debt becomes the less affordable it becomes. If something isn’t done soon this vicious cycle could easily lead to much more drastic consequences. As Scotland votes on its independence from a devolved UK (Ireland, Scotland and Wales are now in devolved governance) and Englishness and Britishness once again take on separate meaning, how long before one nation decides they would fair better outside the EU?

The latest news is that the Spanish economy contracted 0.3% in the final quarter of 2011, making for a slide into a predicted recession in 2012, with the IMF forecasting a 1.7% decline this year and the Bank of Spain predicting a 2012 contraction of 1.5%, they then predict a 0.3% decline and a 0.2% growth respectively for 2013.

If the Euro does collapse or economies do start to bailout of the Euro instead of being bailed out by it, then it will likely be because either Spain, Italy or both can no longer afford to refinance their deficit, and because the EU can’t (or won’t) raise sufficient funds to bailout these European behemoths. Once that happens all bets are off.

With the Spanish economy set to fall back into recession and such a massive unemployment rate (23% and 50% of the under 20), we once again face the danger that the crisis itself will breed its own worst outcome. That, because economies like Spain are caught up in such a mess that their debt will just become so high risk that they will no longer be able to stay afloat and will have to push the bailout button — and then what if no one answers?

Spain now has the highest unemployment rate in the OECD, with 295,000 more people out of work by the end of 2011 taking the total to 5.27 million, some 22.85% of the population, 48.6% if you could only the 18-24 year olds.

Spain was one of five European countries to be downgraded by Fitch after being put on "Ratings Watch Negative" in December last year. Fitch cited in particular Spain’s failure to meet its target deficit-cut for 2011.

Prime Minister Mariano Rajoy has said the 2011 deficit will be about eight percent of GDP — far beyond the 6.0-percent target — but has promised to abide by Spain target of lowering the deficit to 4.4 percent of GDP in 2012 and 3.0 percent of GDP in 2013. Rajoy plans 8.9 billion euros ($11.7 billion) in new budget cuts, tax increases to rake in 6.3 billion euros, and an anti-tax fraud campaign to recoup about 8.2 billion euros. But with unemployment so high, meaning less taxes to pay more benefits, there are real worries that cost-cutting alone just isn’t going to cut-it so to speak.

"[Spain's] material fiscal slippage primarily reflects an over-shoot at the regional government level and underscores a structural weakness in Spain’s fiscal framework and has undermined the credibility of the fiscal consolidation programme," Fitch said in a report. "In Fitch’s view, the official 2012 deficit target of 4.4 percent is now likely to prove unrealistic. The agency therefore assumes that this year’s deficit will come in at 6 percent, and that the stated 3-percent target will now not be reached until 2014." The agency said economic re-balancing in Spain was hindered by a rigid labour market.

Spain is taking the fore because of its huge labour-market problems, but the same questions are being faced by all those caught up in the crisis; how to get back to growth without spending, how to reinvent the wheel and accumulate without speculation. The EU could not afford to bailout Spain without some major assistance, let alone if both Spain and Italy need help at the same time.

Right now, the Euro is akin to a sinking ship and no one knows how or even if it can be saved. As we all know even from recent history it isn’t long in that situation before the calls to abandon ship start ringing out.

Article written by Liam Bailey on behalf of Turkey property developer Wise Move Homes, famous for the Altinkum property gem the Apollon Holiday Village.

In a volatile world investors are looking more than ever for financial havens, and the Cayman islands, along with several other destinations in the Caribbean are coming up trumps. Here are some of the main reasons why foreigners are snapping up property in the Cayman Islands as investments and holiday homes:

Cheap Caribbean Property:

It’s the Caribbean for goodness sakes. The Cayman Islands represent true paradise. Compared to the likes of the Dominican Republic there is hardly any development at all in the Cayman Islands. The government has always been careful to ensure the beauty and paradise of the islands was kept intact when considering planning applications.

Even now that the Cayman Islands is becoming popular as an overseas property destination, the availability of properties is almost all resort developments. Thus, the properties are serving twin purposes, they are the supply for overseas buyers’ demand, but are also supplying the tourism industry with its availability.

The Cayman Islands represent an untouched beauty that barely exists anymore, and those who visit normally come again and again, so of course having a holiday home on the Caymand Islands is a fantastic investment or holiday home, which makes you very popular at parties.

Investment Potential:

Cayman Islands property prices are among the lowest in the Caribbean, which gives incredible scope for strong rental yields and capital growth.

As was mentioned most of the availability is in resort developments. The majority of them come with guaranteed rental yields and even attractive buy back deals.

Packages Geared Towards Pensions

The credit crunch wiped trillions of dollars off stock markets, and left many pensioners pensionless. With everyone growing older and living longer more and more people are choosing to supplement whatever state pension they may be entitled to with their own investments and strategies.

The British Self Invested Personal Pension is a prime example. The plan allows Brits to make their own investments for their pension pot, including commercial property. Many Brits are buying into holiday resort properties as part of SIPPs because the fact that they are managed as part of the resorts makes them SIPPable.

Many resort developments on the Cayman Islands fit into this category, including the Dolphin Estates development. SIPP investors are looking for safe returns. Dolphin Estates guarantees them 20% over 4 years. They can take this as a guaranteed 5% rental yield each year, or a 120% buy back on year 4. It also leaves the option open to try a profitable sale on the open market in year 4 before pocketing the additional 20% from the developer. Though you should double check this in the terms.

Article written by Liam Bailey on behalf of Select Resorts, a leading UK based overseas property agent marketing Cayman Islands land for sale from £40k.

The rapid devaluation of cash first triggered by instability in the foreign exchange markets, and then by that and roaring inflation caused by money printing in the US and UK, has led to the world’s wealthy individuals and investors seeking to put their cash into something safer than, well, cash. This first kicked off a rush on buying gold, but then, as the price of gold soared higher and higher people began looking to property.

As a rule of thumb, property will almost always appreciate in value over the long term, at least, we have always held this to be true, but all bets are off since the financial crisis. So, the wealthy buyers are looking to destinations that are now proven to have seen property prices holding firm against the downturn.

The Caribbean is home to a predominantly large number of such locations. Because Caribbean property has always been predominantly bought by wealthy lifestyle buyers, there was very little rush selling when the crisis struck, nor are developers and agents relying on rapid sales (one property sold for £300,000 is equivalent to selling 10 properties at £30,000). So, because prices are set by sales in the vicinity, this meant Caribbean property held its value in most places.

St Kitts is certainly one of those locations. This can be seen in the price of the Ocean’s Edge resort development, currently being marketed by Savills affiliate overseas property agent Select Resorts. Even now, 4 years into the financial crisis (longer in the US) you can’t buy a property in this development for under $372,000.

St Kitts property sales have been recovering since the second half of 2009. Some people believe this is because the world realised that the world wasn’t going to end, and that the wealthy would indeed survive with their money bags intact, at which point they became keen on getting their money into something that wasn’t haemorrhaging value.

St Lucia, Barbados, Grenada and Trinidad and Tobago all made the grade as safe havens, but St Kitts and Nevis had an ace up their sleeve. Anyone who buys a property in St Kitts and Nevis costing $350k or more is immediately granted citizenship and a slew of tax benefits to go with. Tax benefits including no world income taxation, no personal tax, no restriction on the repatriation of profits and imported capital, no inheritance tax, no withholding tax for nationals living abroad and no tax credits.

Understandably, the tax benefits combined with the safety of property in St Kitts as an asset has led to a great recovery in sales over the last 18 months.

The world is still reeling from the effects of the financial crisis, one of which was to completely collapse sales of Cape Verde property to foreign buyers. The Tortuga Beach and Spa resort launched to off plan buyers in 2007 but it might as well have not bothered. When thousands of people lost their shirts on Dubai property, everyone became extra cautious about off plan property, very few would risk it, and with very few buyers overall this meant no one.

But now Cape Verde is experiencing what can only be called a surge, or at least a flurry of overseas demand, with most of the buyers coming from Britain and snapping up off plan properties. What’s changed?

Well, it is partly to do with the fact that confidence is generally returning to global economies, partly to do with the fact that the UK economic recovery is solidifying, but it is mostly because of a growing desire for Brits to invest in their own pension funds, and the fact that Cape Verde property is an investment that is both safe and capable of bringing good returns.

For years the British middle class hadn’t to worry about their pension, we all lived under the security of the state pension for all. But as people continue to live longer and longer and with no reduction in the percentage of people wanting to live work-free, for the first time in the modern British era the state pension for all is falling into jeopardy.

So more and more of us have sought to invest in pensions. Before the financial crisis we were quite happy just to sheepishly put our money into high street pensions. But we all know what happened there, the stock market crashing took all our pensions with it.

So, there we were left with a need to invest in our own pensions, and knowing that high street fund managers might not be the best people to help us in this respect. For once, the government response to this quandary actually helped. The Self Invested Personal Pension allows us to invest in stocks and shares from internationally recognised exchanges, gilts, bonds and commercial property.

SIPPs combined with the growing desire among Brits to build their own pension funds are certainly a main reason for the increasing sales of Cape Verde property. But this is only because Cape Verde has become known as one of the world’s investment safe havens.

SIPP investors invest in property because they want a safe, long term investment, although they are usually looking for moderate-good rental returns as well. Cape Verde property is a good long term bet, because of its growing popularity and lack of building space.

Cape Verde offers the attributes of the Caribbean, within a short-haul flight of Europe and Britain. Because of this, although it did suffer at the hands of the financial crisis, tourism to Cape Verde grew strongly before the crunch and is set to grow even faster as the world recovers. Cape Verde property is also comparatively cheap compared to that of the Caribbean.

Undoubtedly the Cape Verdean developers have helped themselves. You have the three phases of Resort Group’s Melia Franchise which have sold rapidly in the last 18 months, and almost entirely to British SIPP investors, because the packages were geared to be the perfect SIPP investments.

Only resort and hotel properties are allowable as part of a SIPP, because the properties are part of a commercial entity in the resort. SIPP property investors are told to look for resorts with brands capable of achieving good occupancy, and where the rentals are pooled between owners.

Sol Melia has a turnover in excess of €1 billion, 2 million registered customers and 4.5 million hits per month on their online network, and on all three phases the rentals were to be pooled between owners of similar units.

Tortuga Beach Resort and spa offered a 10% rental guarantee in year one and continued rental management as part of the resort, the 1400 unit Dunas Beach Resort offers 15 years rental management with 50% of the NET rental income being distributed and shared by pools of similar sized units, and Llana Beach offers investments in 5 star hotel suites. Together, and sharing facilities makes this an incredible resort on Sal Island.

The bookings are already flowing, and with the aforementioned shortage of space to build on these rugged beach-fringed islands of Cape Verde, it is easy to see why SIPP investors are boosting sales of Cape Verde property.

SIPP investors can invest in the following as part of a SIPP, UK Equities (including Investment Trusts AIM Shares & ETFs,) Gilts, Bonds, regulated Unit Trusts, & OEICs, Shares in recognised overseas Stock Markets (NYSE, NASDAQ, CAC to name but a few), and Commercial Property.

You will see no holiday homes or residential property on that list, yet most of us have heard about the huge successes of overseas property in Cape Verde, Turkey and the Cayman Islands, which have sold out almost completely to SIPP investors in recent years.

What you will see if you look into these properties is that they are resort properties or hotel room investments aka apart-hotels, being sold to investors but under the rental management of a commercial resort. This type of investment opportunity is not only allowable under a SIPP, but they are mostly perfect for SIPP investment.

Obviously SIPP investors are looking to make the biggest returns possible for their old age, but they are also keen not to be left with less than they put in or close to nothing as well. Thus, most will have some exposure to the high-risk high-reward game of stocks and shares, but have a bigger exposure to the relative safety of property, which usually always appreciates in value over the long term, and when researched properly has a sound exit strategy.

So SIPP investors want a safe investment, with safe but good returns and a reliable exit strategy. Resort and hotel property deals almost always fit this profile.

Resort/hotel properties come under the management of a professional hotel or resort brand (investors should look for brands that are well established and capable of letting the number of units being built all year round), this means that they are a serviced hands-free investment perfect for a SIPP fund. But even better is that the professional rental management makes good yields very likely from rental income, and also a good chance of capital appreciation.

In fact, many such properties will guarantee the rental yield, and/or guarantee to buy to unit back after a given period for a given profit. An example of a perfect deal for a SIPP property investment is a 5 year guaranteed rental yield of maybe 5-6 percent, and a guaranteed buy back of 125% after the five years. What would make that even better would be for the buy-back to be optional, and for the investor to be able to try and sell for more on the open market before deciding.

One example of a near perfect SIPP allowed property investment is the land plots for sale in Cayman Islands under the Dolphin Estates brand on Brac. The developer guarantees a 20% return on investment over 4 years. This can either be taken annually as a rental guarantee, or at the end of the term as a buy back at 120% of the asking price, or last but not least sell the plot on the open market after 4 years, and still take the 20% from the developer allowing you to make an even bigger return.

Another is the Melia resort properties in Cape Verde. Cape Verde is protected from overdevelopment by the government, and because there is very little land suitable to build on. This will ensure that Cape Verde properties hold their value, and with the Melia brand managing rentals this means a good overall return on investment is all but guaranteed on these deals.

There are dozens of mainstream tourism and property hotspots including Bodrum, and dozens more off the beaten track. Belek and Alanya are sort of in between that, mainstream popularity but still, better known by select groups and more discerning travellers. Here are three Turkey property greats…

Belek

Belek is the golfing capital of Turkey, and since 2009 has become known as the next Algarve (references may have been made before this but it caught on in 2009). Home to eleven of Turkey’s 18 golf courses, Belek is a small town by international standards, but its growing golf industry mean it is home to some of the finest hotels, restaurants, bars and shops in all of Turkey. Brits feel at home in Belek.

Until recently there was no freehold property in Belek, but recent law changes have seen a couple of freehold opportunities springing up. Because of this demand for privately let properties is already outstripping capacity, especially of really good units. Of course the best thing about Belek is the fact that most people are primarily buying a holiday home, with rentals as a secondary consideration, when buying like this you can’t lose in Belek.

Bodrum

Bodrum property is definitely not middle of anything. Bodrum is one of the hottest tourist destinations in Turkey. According to aviation data collection site Anna.Aero (possibly the largest repository of aviation data in the world) traffic through Bodrum international airport grew 11% in 2010 compared to 2009. According to the website’s data for 2011, traffic through Bodrum international is growing at 13% year on year, based on the average of monthly figures for the first half of the year — the biggest growth was 28.8% in April.

We all know that rising tourism is boon for a property market like Bodrum, because property buyers will look to make money from rentals to holiday makers, and more holiday makers means higher occupancy, and higher rental yields.

Further evidence of the success of destinations like Bodrum comes from Rightmove, the UK’s largest overseas property portal. According to the portal’s monthly overseas data, searches for property in Mugla province are among the fastest growing in the world, to be precise it was the 7th fastest growing top trending region in June.

Alanya

Alanya property is less known about in the mainstream than the likes of Antalya, Istanbul or even Belek, but those in the know, know that it is one of Turkey’s top spots. In the summer millions of people come from all over the world to enjoy the food, culture, atmosphere, not to mention the sun, sea and sand. It is also home to Turkey’s largest population of British expats.

Alanya’s one failing until recently was its lack of an airport, which is arguably the reason why it never reached mainstream popularity. Expats needn’t care about the 90 minute journey to and from Antalya airport, and Alanya attracts primarily those who plan to holiday for at least 2 weeks.

Now though, that is all set to change as the long-awaited Gazipasa airport welcomed its first international flight several months ago. The airport is a long way from being as well serviced as Antalya, but when runway expansion works are complete airport operators expect its coverage to widen rapidly. This is expected to trigger a new property boom in the city and surrounding areas.

Amidst all this volatility, real estate is seen as a safe haven, however, even real estate is volatile in many countries, especially established markets. Within all this instability, volatility and uncertainty stands a rock, Germany.

In Germany only 43% of the population own their own homes. This renters culture builds into a promising investment prospect.

Firstly, because there was no rush on mortgages Germany has not fallen prey to the great sub-prime crash, and German banks are as stable and strong as ever. Secondly, in Germany house prices are controlled by rents, and rents are controlled by laws (tied to wages), because they can’t have the population priced into homelessness by greedy landlords. When wages grow rents are allowed to grow and when rents grow prices grow, but only slightly.

Anyone who has known the German property market for a few years knows that a boom is always just around the corner but never actually arrives. If you want an investment that will appreciate rapidly or even at all, then Germany is not for you. However, if you are happy to invest into a property with practically guaranteed 100% occupancy, allowing you to calculate yields beyond a shadow, and then look towards Germany.

Berlin is particularly interesting, because up to 90% of the population there live in rented accommodation. What’s more there is an abundance of refurbished and modernised apartments in the city offering top quality apartments are undervalued prices. Even in Berlin rental yields average 5%, but again, we are talking about a reliable, long-term buy to let investment.

Turkey is now the fastest growing economy in the world, and has been in the top 5 fastest growing for over a year now. According to the Association of Real Estate Investment Companies (GYODER), foreign purchases increased by 40% last year. But of course, you can’t buy a property in Turkey; you have to buy on a street, in a town or city, within a region. Here are 3 of the hottest cities right now to aide in the initial choice.

1: Istanbul

Number one has to be Istanbul. The population of Istanbul is one of the fastest growing in the world, with estimations that it will rise from the current 12.7 million to 15 million by 2023. According to the same estimates Istanbul will need 250,000 of the 500,000 homes needed in Istanbul by then.

But of course the population is also growing rapidly in affluence. Because of this combination, and the high liquidity in the banking sector, which is fuelling 25% per year mortgage growth, experts are reporting demand for quality units outstripping supply by a huge margin, and developers unable to keep up with soaring demand.

This perfect storm is making Istanbul property one of the hottest residential investments, not only in Turkey, but in the world as well. Lest we not forget that Istanbul is also a hugely popular and growing tourism destination as well.

2: Antalya

This is a strange one. We are talking about Istanbul’s residential investment potential because it is such a huge city with a rapidly growing population, and here we have Antalya, the third biggest city in Turkey and also with a rapidly growing population, yet Antalya is predominantly a holiday home investment destination. This speaks to undiscovered opportunities for residential property investment.

Antalya has the best of both worlds. It is a metropolis with a population growing rapidly in affluence and number, and there are undoubtedly residential investment opportunities. But it is also a coastal resort town where millions of people from around the world come to enjoy the sun, sea, sand and ambiance each year through its well served international airport.

There is the potential to pick up a property on the outskirts of the city centre, which would bring residential rentals, but could also be rented out to holiday makers if a void corresponds with holiday season.

Antalya property is surprisingly cheap given this all-rounder appeal, and this complete package is why it is my second hottest tip for residential investment in Turkey.

3: Izmir

Izmir is Turkey’s second largest city, and like those above it also has a rapidly growing population. This is a trend because people are moving into these main centres from areas across Turkey to find better opportunities for work. Izmir is a largely undiscovered opportunity; prices are far lower than that of Istanbul and the potential for strong yields and capital growth is just as strong.

This is a guest post by Aydin Cakir, director of Turkey property agent New Home in Turkey

Well, I will let you decided. As well as all that above, we now see that employment growth (unemployment now in single figures), and the growing affluence of the population, combined with high liquidity is fuelling a boom on domestic consumption, as well as fuelling demand for housing not only through necessity, but also through desire and aspiration to move up the property ladder.

According to the Turkish association of real estate investment companies, foreign purchases of Turkish property grew 40% in 2010 compared to 2009. I will go on record now to say that foreign sales of Turkish property will have grown by at least 20% when GYODER releases data for 2011.

We already know that there has been strong growth in tourism. We know that there has been a particularly strong growth in tourism from Arab countries fuelled by the Arab Spring, which caused concerns about Turkey’s rivals in the Islamic holiday arena, as well as Turkey’s visa-free deals signed with many Arab countries. We also know of a similar surge in Russian tourism fuelled by the visa-free deal, and that Russians are becoming the dominant grouping of foreign buyers in some of Turkey’s top markets. This knowledge is enough for me to make such a strong prediction about Turkish property investment in 2011.

Aydin first confirmed that Russians are becoming the dominant nationality of buyers in “most areas” of Turkey. He went on to say that Russians are now the biggest buyers of property in Alanya, Antalya, Marmaris and Fethiye.

In the article about Marmaris Hasan Ate?, head of the Union of Marmaris Real Estate Agencies said:

“We real estate agencies in Marmaris are feeling the impact of the European financial crisis more this year. So far, we have not sold a single property to a European client. Now they are selling their homes, some at lower prices [than they paid to buy them],” he said, explaining that the opposite is true of Russian buyers who are rapidly growing in numbers.

From this you would think that this trend would be a regional thing, maybe the province of Aydin, or the wider south western coast, but from the four locations given by Cakir we can see this trend in the three regions most popular with foreign buyers, Antalya, Mugla and Aydin.

Russia is a massive country, with a rapidly growing economy and Russian buyers have long been a growing force in the overseas property industry. According to a major survey by leading Russian property magazine International Residence at the Moscow International Investment Show, Turkey is now the third most popular choice among the $12 billion Russian overseas property market, after Bulgaria and Spain.