Skip to content

More doom and gloom on the forums but in Dubai investors are ‘flying high’

Other factors such as investment in infrastructure, attracting a strong tourist market and getting rid of burdensome red tape are also taken into account by investors. But another key point emerges on the property forums this week. Is it actually possible to make money out of an emerging market in the short term?

{jumi [adcode/adsense-468×60.txt]}

A thread on the totallyproperty.com overseas forum points out that all the right buttons might be being pressed but at the end of the day investors want to make money. It sites Croatia as a prime example of an emerging market that has been actively enticing investors but then not making it possible for them to make money.

Senior forum member kk174 says that it takes a certain calibre of investor to look at high risk emerging markets. Serbia, Kurdistan in northern Iraq, Albania and Kosovo are all mentioned as high risk emerging markets where there are obviously opportunities for those with a cool head.

Even in more established 'new' markets like Brazil there can be concerns. The same forum has a thread highlighting issues surrounding rental yields. Opinion varies, of course, but there seems to be a trend of higher property prices and lower rental returns which is not what many investors expected.

There is concern that with the price of air tickets rising and a general tightening of belts in the US and Europe property owners will have to rely on native Brazilians for rental income. One resort Pipa, managed 62% occupancy rate last year but this year there has been a slower start.

One member states that outside the Brazilian high season properties are lying empty, while another points out new golf courses are adding to the attractiveness of resorts but senior member Dotty says plainly: 'I do remember a few years back when Natal had a lot more visitors than we do at present. It is rocky waters at the moment and business is miserable for the holiday market and very costly too.'

So what about established markets like France and Spain? There are investors who would rather buy in an established real estate system than in an emerging market with no track record and economic instability.

There are bargains in Spain for those who want to invest and France is experiencing a stability that makes it an attractive long term investment.

However, it is clear that with the Governor of the Bank of England warning the UK population that wages are stagnating, property prices falling and inflation rising and everyone is going to have less money to spend, that UK investors are feeling the pinch right now. But it is not the end for UK investors according to the singingpig.co.uk forum. General opinion is that investors make money when the market is down.

But it is those who can generate cashflow without having to get a mortgage that are most likely to benefit according to several posters.

But not all is positive. 'I would say that the housing market investor should stay out of the market until capital values drop to a level that reflects a realistic level of net rent. Investing on the back of the hope of ever increasing capital values is finished,' says member Chas Newall.

Pessimism is also expressed on the propertysecrets forum. A slowing economy, rising inflation, rising costs and those who want to get out cannot because the market is flat.

It is a real doom and gloom week. Avoid the UK, emerging markets might not be stable enough, those like Brazil might not bring in enough rental income, and even good bets like Bulgaria are being slated as suffering from oversupply, short rental season, poor infrastructure and limited re-sale market.

However Dubai can cheer us all up. It is still one of the fastest growing real estate markets in the world and the sun is shining. On the dubaiforum.co.uk members report a positive investment climate. The rental market is 'flying' and investors are making money.

'The Dubai property market is setting the standards for property development throughout the world and with landmark developments such as Dubai land, Sports City, The World and The Palm, the Dubai property market will remain the future of overseas real estate investment for years to come,' says abhinav2492.

Related