With house prices stabilising in parts and foreign national buyer interest stirring in Spain, full-blown infrastructure projects in Turkey and the unassuming Polish powerhouse, what’s in store for 2015?
Spain – New Build on the move? Costa Blanca?
New Build purchasing is starting to come back in vogue. Odd as this may seem, partly because there are lots of unsold homes and because some people feel they got their fingers burnt in the 2007 heyday, it makes sense on a number of levels. Developers have plots of land but until now, demand has not been obvious, nor has access to developer finance been easy. Now demand is re-emerging, not just from Brits, but a broader spread of nationalities. And sensible developers, who have taken a measured approach in the past, have finance in their coffers to invest in new building, but again in a measured way, particularly on the Costa Blanca.
Statistics back this up with the number of permits issued to build new homes in Spain up by 5.7 per cent in the first nine months of 2014 compared with the same period in 2013 (Spanish Ministry of Housing). What’s more, with all the recent updates to the building regulations, the build quality is that much higher, owing to the more demanding specifications, helping minimise running and maintenance costs for holiday home buyers.
Investors are starting to look at buying apartments in the cities again too, not just the Costas. Pre- 2008, prices were higher and rental income not that great, but now, with property prices as low as they may possibly go, yields of 5-15 per cent are not unheard of. Popular coastal cities like Barcelona, with its high-speed rail link and Valencia, offer great opportunities.
Mortgage interest rates are potentially as low as they can go, hinged to Euribor, which fell to its lowest rate in November 2014. This is likely to persist in 2015 given the Eurozone is still facing a bumpy economic ride. But it is worth bearing in mind, Spanish mortgages tend to be less flexible than UK mortgages, with rates usually set once a year and less availability of interest-only products.
Turkey – an accessible property market
The ambition is to render Istanbul indispensable in East-West travel and to rival Dubai. So plans are proceeding for the World’s biggest airport, with ambitious talk of it opening in 2019, at Arnavutköy, 20 miles north of Istanbul. The new airport will draw interest to areas like Kagithane, near Sisli and further out, counterbalancing areas of recent demand to the West like Esenyurt, Beylikduzu, Bahcesehir with its marina and Büyükçekmece.
Turkey will strengthen in 2015, whilst economic growth will be lower at 3% and Parliamentary elections loom in June 2015, the fundamentals of Turkey remain. A tourist magnet because of its culture, climate, lifestyle and inexpensive property market. A 3-bed holiday villa on the Mediterranean coast, near Fethiye could be as little as £120,000. For investors seeking an alternative means of getting a decent return, when they are able to use some of their pension pots from April, buying a fraction of a hotel room is accessible, starting from £9,000 and delivering 8% returns.
Poland – a property market and economy in bloom
Poland will emerge more as a serious economic competitor to Germany. Average growth rates have been 3.3% for the last 20 years and are projected to be 2.5% per annum. Shale Gas is a potential game-changer. Poland is well-positioned to lead shale gas development in Europe, given it has one of the largest reserves in Europe.
Poland is obliged to join the single currency bloc as part of its 2004 European Union entry deal, but has not rushed to do so. Joining the Euro could provide a fillip to Polish property prices. We only need to look to other countries which have joined the Euro, and experienced an almost immediate, inflation in property prices.
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