REVEALED: Guide to investing overseas in 2013

From Istanbul to Mongolia, a review of where’s good and where’s bad to invest this year
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Bright Investment: ISTANBUL

\nTurkey is expected to be the fastest growing economy in the OECD by 2017, with an annual average GDP growth rate of 6.71 percent. A revision to Turkish property law announced in May 2012 enables the citizens of 183 nations to own property in Turkey now, opening the market towards cash-rich investors from Russia and the Gulf states for the first time.
\nIstanbul’s housing market saw price growth of 17.75 percent in September 2012 year-on-year and rental increases of 15.2 percent for the same period.
\nHighlighted by the economic growth and relaxed investment regulations, the Istanbul market outlook is bright.
\nSource: IP Global Property Barometer
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Bright Investment: PERTH

\nLocated in the resource-rich state of Western Australia, Perth’s relationship with the mining sector continues to underpin GDP and employment growth and the city’s residential property market has been growing along with the broader economy.
\nApartment prices have grown 12.73 percent year-on-year, as of September, and apartment rents are up 20.83 percent for the year according to the REIDIN real estate index.
\nPerth home prices are expected to grow by a cumulative 20.4 percent over the next three years through 2015.
\nSource: IP Global Property Barometer
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Bright Investment: BOSTON

\nThe Boston market is rebounding quickly, with median price gains of 5.3 percent so far in 2012, with prices now only about 5.6 percent below their 2005 peak and vacancy rate below the national average at 3.6 percent in the third quarter.
\nBenefiting from a strong local economy supported by growth industries such as technology, education, healthcare and bio-tech, Boston’s property market has recovered much faster than most other US cities, which continue to be plagued by high unemployment and foreclosure activity.
\nBuoyed by strong demand and low inventory levels, the city is likely to see continued price and rental growth over the long term.
\nSource: IP Global Property Barometer
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Fair Investment: MONGOLIA

\nDriven by the boom in the mining industry coupled with the increasing influx of international capital, the Mongolian economy is forecast by the IMF to grow by 12.7 percent and 15.7 percent respectively in 2012 and 2013.
\nIn Ulaanbaatar, there has been a rapid increase in the number of wealthy local Mongolians and expatriates attracted to the area by employment and stronger economy.
\nQuality accommodation suitable for these people is very limited however, especially in high-demand areas such as the CBD, and property investors are beginning to see opportunity.
\nDespite the strong economy and shortage of quality housing, however, risks remain due to the possibility of a slowdown in exports and high inflation.
\nSource: IP Global Property Barometer
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Fair Investment: PARIS

\nNew president Francois Hollande’s proposed roll out of higher taxes on capital gains and rental income have caused many wealthy Parisians to seek refuge abroad, most notably in London.
\nAs a result, luxury home prices fell 3.4 percent in the first half of 2012 and demand slowed according to real estate agents at Savills. Though many investors are taking a wait-and-see approach until the tax issue has been settled, others see the declining prices and a weak euro as an opportunity to seize up prime Parisian properties on the cheap.
\nSource: IP Global Property Barometer
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Fair Investment: LOS ANGELES

\nIn the first nine months of 2012, the median home price in L.A. has increased 4.2 percent, but still 38 percent off its pre-recession peak. With foreclosures having dropped 29 percent year-on-year in the third quarter, the housing market seems to have turned a corner.
\nCompletions will increase significantly next year pushing up the inventory level. Risks remain however as high unemployment and the amount of “shadow inventory” remaining could continue to weigh down the market.
\nSource: IP Global Property Barometer
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Cloudy Investment: COASTAL SPAIN

\n2012 saw Spanish property prices continue to decline, highlighted by a 9.5 percent year-on-year price decrease in September 2012 and nationwide home prices are now nearly as low as they were in 2002, erasing a decade’s worth of equity for many homeowners.
\nThe coastal regions of Spain, especially popular tourist destinations, were significantly overdeveloped during the boom years. Banks eager to reduce their real estate exposure, are now offering foreclosed properties at high discounts, which has only served to further depress the market.
\nWith a dire overall economic outlook in 2013, highlighted by 25 percent unemployment in the third quarter and a -1.3% GDP growth forecast by the IMF, investors would be wise to avoid the Spanish market for the foreseeable future.
\nSource: IP Global Property Barometer
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Cloudy Investment: MIAMI

\nThe Miami market has been showing some signs of life thus far in 2012, recording 10 consecutive months of price appreciation amid high transaction levels boosted by cash buyers from abroad.
\nCondominium prices increased 36.2 percent year-on-year as of September 2012. However, the Miami metro area still ranked in the top 10 cities with the highest foreclosure rates in the US, highlighted by an 11 percent increase in foreclosure fillings in Q3 2012 year-on-year.
\nWithout significant improvements in the overall economic fundamentals of the area, the over-supply of housing residual from the building boom will continue to overshadow the Miami property market for several years to come.
\nSource: IP Global Property Barometer
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Cloudy Investment: SINGAPORE

\nResale prices of private non-landed homes in Singapore increased by 3.2 percent in the third quarter of 2012, according to the latest data from the Singapore Real Estate Exchange (SRX), while price of new units fell 2.2 percent over the same period.
\nThe introduction of the Additional Buyer’s Stamp Duty (ABSD) and other government measures intended to cool the property market last December has clearly had a significant impact on the market.
\nReal estate consultants at Jones Lang LaSalle have forecast that sales volumes could drop by up to 27 percent in 2013.
\nHigh liquidity and the low interest rate environment is likely the reason the market has stayed stable thus far, but policy makers are determined to cool the market and have indicated they may roll out further cooling measures if the prices remain elevated.
\nSource: IP Global Property Barometer