ORIGINALLY PUBLISHED ON FEBRUARY 19, 2016|MANSION GLOBAL|
The U.S. dollar has been soaring against a number of currencies, but what does this mean if you’re looking to invest in property overseas?
Data compiled on behalf of Mansion Global by the real-estate consultancy Knight Frank shows a sharp increase in the purchasing power of American real-estate investors over the past two years and highlights several markets where bargains abound for those buying with dollars.
Taimur Khan, senior research analyst at Knight Frank, said: “The strength of the dollar presents a number of opportunities for U.S. buyers looking to purchase abroad. Based on a selection of key countries, a U.S. buyer purchasing the equivalent of a $5 million property in local currency would have significantly more purchasing power in January 2016 compared to two years’ earlier—with Brazil and Turkey proving some of the most favorable locations.”
Brazil’s economy is mired in recession, with the government facing a sweeping corruption probe. While this may not spell good news for Brazilians, it certainly presents opportunities for American property investors, whose purchasing power has risen by 68% over the past two years as the real depreciated against the dollar, according to Knight Frank.
Frederico Judice Araujo, director of Judice & Araujo Imóveis, a Rio de Janeiro-based affiliate of Christie’s International Real Estate, said: “Due to the Brazilian crisis, prices of real estate in Brazil are going down and there are some very interesting deals. It’s a good time for foreigners to buy.”
According to Araujo, it’s not difficult for Americans to purchase property in Brazil once they have a “Cadastro de Pessoas Fisicas,” or Individual Taxpayer Registry, which is similar to a social security number and takes only a few days to process.
WHAT’S ON THE MARKET
Bossa Nova Sotheby’s International Realty
PRICE: $4.4 million
LOCATION: Baía Formosa
Located in Armação dos Búzios, a resort set on an ocean peninsula east of Rio de Janeiro and surrounded by beautiful beaches, this 22-bedroom, 23-bathroom property spans more than 12,000 square feet and boasts a tennis court as well as guest quarters.
Changes to the law have made it easier in recent years for foreigners to snap up properties in Turkey. This led to a near-doubling in the number of foreign buyers between August 2014 and August 2015.
In particular, the Bodrum peninsula—whose marinas, beach resorts and fishing villages have made it a summer playground to rival the south of France and Ibiza—has seen a surge of interest from international buyers, while Istanbul is popular with investors.
Even those who invested a year ago should have seen some returns. Turkey topped Knight Frank’s global house price index in the third quarter of last year, with year-on-year growth of almost 20%. In addition, Americans have seen their purchasing power increase by 36% over the past two years due to the Turkish lira’s slump vs the dollar.
Cameron Deggin, managing director of Property Turkey, said: “American investors are gradually waking up to the potential of Turkey. We are seeing fairly strong repeat purchases from our investor clients, who have already worked the market and achieved strong returns. We currently have several American clients who have been investing regularly since 2009.”
WHAT’S ON THE MARKET
PRICE: $6.5 million
This 3-bedroom fully serviced private freehold villa at the Mandarin Oriental in Bodrum has access to Mandarin Oriental’s amenities including three secluded beaches, a spa, and six restaurants and bars.
With exchange rates heavily weighted in their favor, foreign investors are showing increasing interest in South Africa’s property market during the country’s current economic downturn, attracted by winter sun and reasonably priced homes.
In particular, an American considering a $5 million home in South Africa would have seen a 48% rise in purchasing power between the beginning of 2014 and last month.
Ronald Ennik, founder of Ennik Estates, an affiliate of Christie’s International Real Estate, said: “There is no question that South African homes are irresistibly well-priced right now from a foreign investment perspective.”
According to Ennik, investors are mainly interested in cosmopolitan Capetown, on South Africa’s southwest coast, and Sandton, an affluent “live-work-play” precinct of Johannesburg, the country’s financial and commercial capital.
WHAT’S ON THE MARKET
Lew Geffen Sotheby’s International Realty
PRICE: $35 million
Described as Africa’s most opulent home, this 33,000-square-feet property boasts reception rooms that accommodate up to 500 guests, a 14-car garage and a gymnasium and spa complete with massage room, squash court and sauna.
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