Gary Hersham: My 5 Property Investment Hotspots Right Now

The current state of flux in global affairs is well reported in the media, which in some instances and locations distorts the realty of the market: in presenting a sensationalist view or opinion to the media, that becomes over exposed – opinion can rapidly be taken as fact.

While the media can and does do a good job of keeping global checks and balance in many developed and democratic countries, sometimes the repetitive and speculative nature of a report can be misleading: look to the prevailing economic data and read the mood, not merely the headlines.

Despite seeming global uncertainty in many markets, away from them and perhaps because of them, are a number of locations that are worthy of consideration for investment:

Portugal: Lisbon

The combination of good weather, good food, access to beaches, culture and architecture have all contributed to Portugal’s appeal. For potential investors and those seeking to become residents of the country, the tax position and visa offer have also been attractive, helping to bring a steady flow of investment both from within Europe and further afield.

In 2009 the Portuguese government introduced a new tax regime called the Non-Habitual Regime (NHR). The benefits under this regime exist for the first 10 years of residence and are open to both those in employment and those who have retired. The only qualification is that those who apply must not have been taxed as a resident for any part of the five years prior to their application. Any income from outside Portugal, that has been taxed in another country under the terms of a tax treaty is exempt from Tax in Portugal, providing that the income does not arise from a source regarded as being Portuguese based under domestic tax. In addition non-habitual residents pay a flat rate of 20% on income received, regardless of the level of income.

Aside from the flat rate 20% income tax, there is a reduced or deferred tax rate on dividends or other income from investments – and in some cases the income may be exempt from tax. There is also no inheritance tax, gift tax or wealth tax in Portugal for non-habitual residents.

Key areas are prime central Lisbon (Avenue da Liberdade, Baixa, Chiado and increasingly Principe Real), Estoril and Cascais (coastal locations approximately 20-30 minutes drive from Lisbon) and Sintra (located in the mountains, a World Heritage site).

Lisbon currently offers better value than Barcelona with prices below €5,000 per sq m.

Spain: Barcelona

A popular European city for residential investment and high on the European ‘must see’ see list of cities, Barcelona is Spain’s second biggest city and the economic, cultural, and administrative capital of Catalonia.

Compact and well-laid-out, the city is easy to navigate and offers a wide range of cultural interests, from theatre and fantastic art (this is the city famed for Gaudí), to architecture from pre-Roman to Modernista. The city also offers the beach and easy access to the beautiful Costa Brava to the north and the Costa Dorada to the south. Situated in the northeast of Spain, on the shores of the Mediterranean, it benefits from good weather March to November and mild winters: its geographical proximity to central Europe and transport connections are an added bonus.

The city also has an excellent port and is one of the best on the Mediterranean for yachts. The current per-square-meter average value is €3,192 euros, according to which is 35 percent below the 2007 peak, when the average cost per meter in this city was €4,888. In 2014 and 2015, prices of secondhand properties increased by 1.5 percent year-on-year,but in 2016 property prices rose by 14.4%: a clear sign of market gaining momentum.

It is clear that, particularly in the Catalan capital, the economic recovery is now in full swing and one of the reasons for this is the fact that Barcelona projects its international image successfully, particularly as far as tourism and the Barcelona brand is concerned.

This is a market that will continue to grow.

USA: Los Angeles

The global HQ of the entertainment and film industry, with a moderate climate and beautiful coast from Malibu to Huntington, LA in the sunshine state of California is an appealing location. While a UCLA report has claimed that the Los Angeles housing market is America’s least affordable, whether buying or renting, it is set to continue on its current upward trajectory.

While the sluggish pace of development is an issue, in prime and super prime areas development is further constrained by the availability of land. While a predominantly domestic based market, due to it being the global HQ of the entertainment and film industry it is home to some very well paid Americans, many of whom wish to call LA and its environs home.

The market is continuing to move upwards, with regular sales and strong domestic demand at all levels in the market.

Expected growth for 2017 is 5% and 4% for 2018, but it is currently still possible to pick up a three bedroom house in the Hollywood Hills for approximately $3.5 million.

France: South of France, Cote d’Azur

A large stretch of the southern coast of France, famed as a Region and for many of its individual towns: Saint Tropez, Saint Raphael, Theoule sur Mer, Cannes, Le Cannet, Antibes, Nice, Saint Jean Cap Ferrat, Ville franche sur Mer, all world famous locations.

Property prices in the Cote d’Azur have increased by 120 per cent in the last ten years, making it one of the most expensive regions of France. The exceptional natural scenery, cuisine and the range and style of property available, both classic and contemporary, is part of its enduring appeal: habitués are starting to rediscover the reasons why they loved the region initially and new comers, including Chinese buyers, are on a journey of discovery.

The market has been relatively slow in resent years: despite the region being a perennial global favourite with the jet set, celebrities and the super wealthy, however a slow down in other international property markets has made some buyers look more at life style purchases, rather than pure investment, particularly above €8 million.

The slow down in resent years means buyers are getting the best value they’ve seen in five or six years and the change in political leadership under President Macron is giving people a new confidence to invest in France.

This is true for all levels of the market but particularly in the super prime market. Cannes and surrounding areas also come with the promise of high rental yields, given the year-round events held in the region, such as the film festival – that take place in the Palais des Festivals. These changes signal that the market is starting to waken from its slumbers.

Greece: Mykonos

The economy and property market in Mykonos continue to gain momentum and are currently experiencing one of their busiest seasons ever.

Mykonos, part of the Cyclades Islands, set in the Aegean sea, has seen itself slowly return to being one of the premier and premium European destinations and the facilities and property on the island have evolved to match. An added attraction for yacht owners has been the ongoing development of the port, which is now able to accommodate the largest of super yachts.

World famous beaches such as Super Paradise and Elia have ensured the development of discrete bars and restaurants: including Buddah Bar and Nobu’s Matsuhisa restaurant.

With further development of the port underway and a limited supply of property, demand looks set to continue increasing.

Gary Hersham is Managing Director and Founder of Beauchamp Estates, a privately owned property firm in the luxury homes market. Beauchamp sell, acquire, invest and rent exclusive luxury residential homes around the world.

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