Bulgaria top for overseas property investment

Wednesday, 21 June 2006 12:00

New research shows that Bulgaria is still the best place to buy an overseas property to invest in.

According to property investment specialists Assetz, the central European state tops the list of places to buy in thanks to cheaper borrowing and a higher loan-to-value ratio boosting the amount of money that can be made.

In the second quarter of 2006 Bulgaria offered investors a 137 per cent annual return on cash invested, up from 116 per cent in March.

“The choice of overseas destinations available to investors is growing increasingly wide, driven by EU expansion, new low cost flight routes and the prospect of hefty returns particularly in emerging markets such as Bulgaria and Poland,” said Assetz managing director Stuart Law.

While Bulgaria continues to top the list, Assetz also highlights Greece as somewhere property investors should keep an eye on.

In the last 12 months house prices in the southern European country have increased by almost eight per cent, meaning returns on cash invested have rocketed from two per cent to 25 per cent, Assetz calculates.

Poland also looks a good investment opportunity, with prices rising between 20 and 30 per cent in the first three months of 2006, Assetz reports. Additionally, property in Warsaw remains among the cheapest in Europe.

House prices are also rising in Spain, with property values up 12.8 per cent in the last year. Strong demand from overseas investors as well as Spanish locals means gross rental yields of eight per cent and total returns on investment of 43 per cent are still available.

“More traditional destinations such as France and Cyprus are still stacking up very well against the competition and hold huge appeal for investors who are attracted by a stable growth pattern, uncomplicated buying process and guaranteed resale market,” said Mr Law.

“However investors keeping an eye on home turf will be interested to know that the six major UK house price indices are now averaging 6.8 per cent growth, resulting in a healthy 44 per cent return on cash invested.”

However, investors have been warned off buying property in the US.

The changes in the value of the dollar mean UK investors have effectively lost seven per cent of their investment, wiping out any gain in house prices.

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