As property prices slump in the US, and the strong dollar offers favourable exchange rates, investors are looking overseas for better returns.
If you invest in US property at the moment, things are looking tough. High inflation, an uncertain economic outlook, and the hangover of the COVID-19 boom have made for a sharp market correction that is hitting some investors in the wallet.
In December, some experts were expecting US property prices to fall 12% from peak to trough. In comparison, the experts at Morgan Stanley predicted prices to fall by 10% between 2022 and 2024.
While a 12% correction might not seem that drastic—especially when compared to the large crisis in 2008—other world markets may offer better returns. As the market cools stateside, some of these locations are looking decidedly tempting.
Panama
Heading south of the border into central America, you’ll find one of the most exciting property prospects on the entire continent. Panama bounced back strongly from the pandemic. Its economy grew by around 10% in 2021 and it is currently performing better than any other economy in central or South America.
Demand is high along the Pacific coast with domestic and international buyers showing interest in second homes. Meanwhile, favourable residency means that Panama is becoming a popular place for retirees as well as some footloose professionals looking for a different quality of life.
Portugal
Another popular destination for footloose professionals is Portugal. The arrival of the digital nomad scheme, which provides opportunities for foreign professionals who are free to relocate, promises to attract a fresh flood of immigration into the country.
This is boosting a housing market that has benefited from the golden visa scheme offering residency and an eventual path to EU citizenship for property buyers. Although that scheme has been scaled back in Porto and Lisbon, it remains open in other parts of the country, creating opportunities for appreciable gains.
Tulum
What was once a popular hippy retreat is fast becoming the powerhouse of Mexico’s resurgent tourism industry. With new airports offering fast international connections, property is becoming increasingly sought after. Tourism is only just really picking up the pace after COVID-19 which means the next few years could be great— whether you’re looking for yield, or you hope to benefit from price appreciation.
The UK
The UK market is far from uniform. Tourist areas such as Cornwall have seen demand surge in recent years as Brits embraced the idea of the staycation. Some of the best gains, though, can be found up north. Manchester’s resurgent economy is attracting businesses and people of all ages. The eventual completion of Hs2 is also expected to bring more people to Britain’s second city.
The overall outlook for 2023, therefore, might not be great, but even in a contracting market, there are exciting opportunities to be had. Not only do these destinations look like they will weather the coming storm relatively unscathed, but in the longer term they have all the ingredients for rapid and sustained growth.
Contact us today to discuss property investment opportunities.
