Where to invest in 2013

The new year could be the year of opportunity and the best time to invest – as long you choose the right asset class, in the right location and a reputable company to work with, says Ray Withers, CEO of investment agency, Property Frontiers.  

“There is a general worldwide feeling of gradual and hesitant recovery after three years of nail-biting recession and it is this cautious optimism we see set to fuel growth and create rewards for those who invest in the right areas,” says Withers.

So where to invest in 2013?

Africa

 

Thanks to a wealth of natural resources, industry and agriculture are thriving in pockets across Africa.  This economic growth is creating stable and prosperous societies with a rapidly growing, youthful population and a wealthy middle class with the desire and ability to buy property. Housing supply cannot keep up however and put local demand together with the requirements of international executives and the shortage becomes almost a drought in countries such as Angola, Uganda and Ghana.

A good example can be found in Uganda’s capital Kampala where it is estimated that in this city alone an additional 34,000 homes need to be built every year to keep up with the demand of the local population.

The USA  

 

It has taken almost four years but at last it seems the US housing market is on the road to recovery with house prices beginning to rise again, sales increasing, foreclosures falling and construction activity moving positively. The Federal Housing Finance Agency has shown the largest growth in house prices since September 2006 and the US Census Bureau shows that in August 2012 the median sales price of new homes in the US increased by 17% year on year. 

In real terms, property prices in the US today are back to where they were around the turn of the millennium, with prices in some states up to 70% below their 2006 peak and around 50% of current rebuild cost. Many US States are in recovery but ones to watch are Buffalo, Rochester, Baltimore, Cleveland, the Eastern states of Florida, Georgia and South Carolina. It is in these locations that large quantities of repossession stock can be bought, refurbished and rented out or resold, all within a short time-frame.

The UK

 

2012 has been a mixed bag for the UK property market with London yet again bucking the trend thanks to the influx of wealth from abroad making the north south divide appear more of a ravine. 

Although price rises have slowed in central London over the last two quarters of 2012, and may stay flat for 2013, we predict they will rise again in 2014 and more dramatically in 2015. 

 

As for the rest of the country, prices in many areas have either stayed static during 2012 or dropped a little. This has led to slow market movement although in many areas houses are starting to sell due to prices being realigned to reality with many properties now selling for anything from 10-20% below the asking price. 

Going forward into 2013/14 it looks like location as ever will be the key. As prices in many areas of London have risen by up to 70% in the last two years, the difference between London and the countryside is the greatest it has ever been meaning that good commutable areas and beauty spots outside central London are going to fare well as families take advantage of this window of opportunity.

 

Brazil

 

As the wealth of Brazil expands so does the growth of the middle classes and with demand outstripping supply in all the major cities and urban hubs, housing at all levels and price points is proving an exciting asset class offering both excellent rental potential and capital appreciation. 

House prices in Rio de Janeiro rose by almost 20% between July 2011 and July 2012 (just under 14% when adjusted for inflation) and in São Paulo rose by over 18% during the same period (up almost 13% when adjusted for inflation).  

With two huge international sporting events coming to Brazil in the near future – the 2014 FIFA World Cup and the 2016 Olympics and Para-Olympics – the world’s eyes will be on the cities of this exceptional success story. 

Cuba

A second Cuban revolution is about to play out some 54 years after Fidel Castro famously took control of this picturesque Caribbean country.  Now under the rule of his brother Raul, Cuba is slowly moving towards capitalism and with it the chance for locals to own Cuban real estate for the first time in decades.  

Until 2011 it was illegal in Cuba to sell property on the open market (the only way to move was to swap your home for another) but now that has all changed and Cubans can buy and sell on the open market. As a result this young booming economy is considered by some to be one of the top five emerging global markets in the world.

2013 should also see a further relaxation on the ownership of property by foreigners. Although at this stage ownership will be limited to upmarket holiday complexes and existing homes currently owned by foreigners we are hoping there will be a wealth of new opportunities in the pipeline.

 

Europe

 

Although the eurozone economy as a whole is expected to remain stagnant throughout 2013 that is not to say property-based investments do not exist.

After the runaway success of the student accommodation investments that Property Frontiers first launched onto the UK market back in 2009, Ray and his team feel there are now similar interesting opportunities in other European countries. Key areas to look at will be major university cities in northern European countries such as The Netherlands and Germany.

–article courtesy of fin24.com

Petrol might be cheaper soon…? (Part III)

It just might all be coincidence, but there seems to be a Great Game underway which, even if it doesn’t quite succeed in convincing Iran to change direction, at least these next seven months keeps war at bay, the noose tightening around Iran and US petrol prices subsiding rather than ratcheting up, thereby also giving US growth and Mr Obama a chance in 2012.

Anyway, instead of being on our way to $130 to $180 shortly, is oil actually going to ease off for a couple of months nearer $100 to $110, a copycat slide of what transpired in 2011 once the 1Q2011 heat went out of the Arab Spring? If oil drops 10 percent to 20 percent these next few months, do allow that global inflation will be even less threatening and growth turning out to have upside potential, certainly in the West, but also the East.

It might boost global financial markets yet more as risk on continues to intensify. That would presumably be friendly for the rand in terms of incoming capital flows.

Falling oil prices and a firmer rand would reverse some of the terrible petrol price increases of recent months. Not only Mr Obama would benefit, but Mr Zuma could also, come December, though all this has hardly been engineered for his benefit, or ours, of course, for we don’t figure on anyone’s agenda.

But it would have been fun if we had. That, though, is reserved for superpowers with a sense of chess and carrying a genuine big stick.

One wonders how Iran sees all of this?

Petrol might be cheaper soon…? (Part II)

The UK turned out to be game to perhaps in conjunction with the US release some strategic oil reserves during the coming summer. Though the IEA doesn’t now see the need for such action, and prefers to keep these global strategic stocks for genuine emergencies, one can see without trying too hard that petrol topping $4 per gallon in the run up to the November US Presidential election does constitute an emergency of some sort, at least to Mr Obama. What’s in it for Mr Cameron isn’t quite clear, aside of the limitless gratitude of a two-term Mr Obama, which presumably could come in handy as a strategic reserve in its own right some time, at least to the UK.

Anyway, the two gents appeared in agreement last week about perhaps releasing strategic oil reserves over the summer and already telling the world now, so that the oil market can presumably incorporate this in its calculations of demand and supply (“down, boys, down!!?”).

But it hasn’t stopped there. All of a sudden Saudi Arabia has become proactive on the grand scale, working overtime to get old oilfields back on stream to boost its potential production (and global reserve buffer) while overnight chartering 11 super tankers capable of moving some 22 million barrels of crude out of harms way and nearer global customers in the West and East by about midyear and all this exciting information also already now being offered to watching markets.

But apparently it doesn’t stop even there. For there is a Gulf Co-operating Council where all the great and good in the Persian Gulf Game are represented. Most of them are apparently also considering upping their game, further boosting the apparent oil supply flows this year and increasing the global oil buffer. Is this the Arab contribution to ensure Iranian sanctions will be successful without penalising Mr Obama?

In other words, it is in the region’s long term interest to get Iran to change its way short of a possibly disastrous war going wrong, and to this end oil prices need not be so high as where they are today ($125), with $100 a much more attractive proposition, fine for the major producers in terms of their fiscal needs, productive viz-a-viz Iran and assisting in getting US petrol prices closer to $3 rather $4 per gallon (and taking the heat off the US economy and Mr Obama)?

It all looks a very concerted effort to get oil prices to behave in a prescribed manner these next seven months, which just happens to coincide with a slight dip in Chinese growth, and this also making it easier to shape oil price expectations?