A tale of two central banks – what the latest interest rate decisions mean for investors

A tale of two central banks – what the latest interest rate decisions mean for investors

United Kingdom United States
  • Federal Reserve rate rise signals confidence in US economy
  • Bank of England continues to hold rates in anticipation of Brexit
  • Property, bonds and currency investments all impacted by latest decisions (easyMarkets)

It’s been decision time for two central banks this week. On Wednesday, the Federal Reserve decided to raise interest rates in the US to 1.00%, which didn’t surprise anyone as it was in line with expectations.  Stocks rose and the dollar slid as a result. Now, the Bank of England hasn’t surprised anyone either, by keeping interest rates in the UK at 0.25%.

“It was the best of times, it was the worst of times.’  The opening line from Charles Dickens’ classic ‘A tale of two cities’ has always been a favorite of mine. Over the last 48 hours, we haven’t seen either the best or worst but we’ve certainly seen interesting times as we have had two very different decisions from two different central banks.”

James Trescothick, Reputation and Education Manager, easyMarkets

But our main protagonists haven’t always announced decisions which met expectations, and those kinds of surprises tend have a big effect on markets.

Just a couple of years ago, there was talk of a race to see whether the UK or the US would raise interest rates first. However, rapid political and economic change meant that though the US economy has carried on its revival after the 2008 financial crisis, the UK economy has stumbled into uncertainty as a result of the Brexit vote.

Interest rate decisions affect different types of investments in different ways, so the team at forex and CFD broker easyMarkets has put together a quick guide on how each type of investment correlates to interest rate decisions.


The easyMarkets guide to investment and interest rates

The currency market

One of the strongest influences that drives the forex markets is interest rate decisions, for two main reasons. First, the higher the interest rate, the higher the rate of return on the investment. Higher interest rates can attract foreign investment, which then increases demand and causes the value of that country’s currency to rise.

Second, for day traders, higher interest rates are often seen as an indication of the perceived strength of a country’s economy. This can mean that the country’s currency can gain strength against another country’s currency, if that economy isn’t considered as strong or as stable, hence the potential to make gains in the change of currency movements.

The aforementioned is why, when a nation’s economy is under pressure, a government or central bank can choose to implement a loose monetary policy, by either increasing the supply of money or decreasing interest rates to encourage borrowing. This tends to make credit cheaper and in turn potentially create more spending and economic growth.

The opposite course of action – a tight monetary policy – sees the central bank constrict spending in an economy either because it views the economy to be growing too quickly, or to slow down inflation. Central banks do this by raising interest rates.

Day traders look for hints for when these two different policies may occur to help them speculate on when a currency may decrease or increase against another.


There is an inverse relationship between bond prices and interest rates. Bond prices tend to fall when interest rates rise, and rise when interest rates fall.

The reason for this is simple. One way for corporations and governments to raise capital is by selling bonds. Higher interest rates make the cost of borrowing more expensive, which tends to lower the demand for lower-yield bonds. Hence their price tends to drop.

When interest rates fall, so does the cost of borrowing, which usually leads to more companies issuing new bonds for growth. This tends to increases demand for higher-yield bonds, which can then push bond prices to rise.

Property investment

Generally speaking, a raise in interest rates means borrowing becomes more expensive, while an interest rate cut means borrowing becomes cheaper. When it comes to property investors, a change in interest rates can change the value of monthly mortgage repayments.

Logically, when interest rates are low and borrowing is cheaper, property investors are incentivized to purchase new properties. When interest rates are high, they will be less likely purchase, as mortgage payments would be higher.


“Interest changes influence different markets in different ways. Indeed, markets can sometimes be affected by the mere speculation of interest rate decisions, before the actual decisions have been made. A good percentage of market movements throughout the year can thus be attributed to interest rates. Thus, regardless of your investment choices or style, interest rates should be of interest to you.”

James Trescothick, easyMarkets

For further details, visit www.easymarkets.com, email pr@easymarkets.com or call +44 203 1500 748.

Risk warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you understand fully the risks involved and do not invest money you cannot afford to lose. Our group of companies through its subsidiaries is licensed by the Cyprus Securities & Exchange Commission (Easy Forex Trading Ltd-CySEC, License Number 079/07), which has been passported in the European Union through the MiFID Directive and in Australia by ASIC (Easy Markets Pty Ltd- AFS license No. 246566). Blue Capital Markets Limited

Top of the Props: Foreign buyers go back to Greece

Top of the Props: Foreign buyers go back to Greece

Greece Italy United States World
  • Greece now 4th most popular country
  • Interest in Greek property at six-month high
  • Italy climbs to third place and Spain holds on to second
  • Investors return to Canada after recent dip in popularity

Foreign property buyers are going back to Greece at the start of 2017, reveals TheMoveChannel.com’s Top of the Props index. The country was the fourth most popular country on the international property portal in January 2017, its first time in the Top 10 in six months.

Greece stormed the charts at the start of the new year, rising 18 places to overtake Portugal in the monthly report. Greek real estate received 2.1 per cent of all enquiries on the international portal during January. This is the country’s highest share of enquiries since August 2013, when it accounted for 3.26 per cent of all enquiries. Greece’s last time in the Top 10 was in July 2016, when it was ranked ninth, with 1.39 per cent of enquiries.

Italy also enjoyed rising overseas interest, climbing five places in the Top of the props chart to be the third most sought-after destination. Italian real estate accounted for 5.97 per cent of January’s enquiries, up from 1.59 per cent in December 2016 and its highest share since August 2012 (6.12 per cent).

Spain held on to second place, confirming the country’s continuing appeal to foreign investors. Portugal rose one place into fifth, increasing its share of enquiries from 1.92 per cent to 2.02 per cent. France slipped into ninth, but remained in the Top 10 for the 17th month in a row, just above Thailand and just below Germany.

After a dip in popularity, following the introduction of Vancouver’s foreign buyer tax last August, Canada saw investors return, with the country climbing into sixth place.

The USA remained the most popular destination on TheMoveChannel.com for the seventh consecutive month, accounting for one in every six enquiries (14.65 per cent).

“After a brief rekindling of interest last summer, the start of 2017 showed signs of overseas demand for Greek property flickering back to life,” comments TheMoveChannel.com Director Dan Johnson.

“Interest was not just contained to one area, but across several regions, with enquiries soaring for property in the North Aegean, Crete, the South Aegean and Attica.

“After a year of political uncertainty elsewhere, talk of national debt and a potential ‘Grexit’ is back in the headlines in 2017, but Greece’s lifestyle appeal has not gone away. In fact, it is more affordable than ever, after house prices have dropped for the last eight years in a row. In 2016, however, they fell 2.2 per cent, the smallest decrease recorded since 2009. With the rate of decline slowing, and owning a holiday home now an attractive alternative to renting, foreign interest in Greek real estate may be showing the first signs of a gradual rebound.”

“US property remains one of the most appealing in the world,” adds Mr. Johnson. “The country’s economy, regardless of its political situation, is stable, with the Federal Reserve still on course to raise interest rates again this year. The country’s economic conditions may be the opposite of Greece, but their popularity shares one key factor: the low price of Greek real estate maximises the potential yield available from rental income, while in the US, investors are racing to find the best possible returns, before property values climb too high.”

Click here to see the full top 40 property destinations for January 2017.


— ENDS –

Notes to Editors

About Lead Galaxy and TheMoveChannel.com

Founded in 1999, www.TheMoveChannel.com is the leading independent website for international property, with more than 1.4 million listings in over 100 countries around the world, marketed on behalf of agents, developers and private owners.

TheMoveChannel.com is one of more than a dozen international property sites operated under the Lead Galaxy brand. Lead Galaxy provides online marketing solutions to thousands of property companies worldwide, focusing on portal listings, email marketing, qualified leads, paid search and social media advertising.

The business is headquartered at 24 Jack’s Place, Corbet Place, Shoreditch, London, E1 6NN.


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Trumping the markets – what impact has the new US President had in his first month in office?

Trumping the markets – what impact has the new US President had in his first month in office?

United States
  • Gold trading at an impressive $1,235.60 OZ (easyMarkets)
  • SP500 trading at an all-time high
  • US Dollar Index performing strongly at 101.63

It may hard to believe, but the drama and turmoil circling 1600 Pennsylvania Avenue have not been around forever – Donald Trump has only officially been installed in the White House as 45th President of the United States for one month!


“The past month has been a carnival, with a parade of Trump’s statements and decisions, from the immigration ban to his latest talk of a fictional terrorist incident in Sweden. It wouldn’t be too shocking if the next big headline was ‘Trump has appointed a horse to a major role in his cabinet,’ after some of the announcements over the last month.”

James Trescothick, Reputation and Education Manager at forex and CFD broker easyMarkets


So, what impact has all of this had on the markets?

Following Trump’s surprise election win in November, the US dollar (USD) and the markets soared. The SP500 reportedly had the strongest run from a president’s first-term win since John F Kennedy. But now that Trump is actually sitting in the Oval Office, how has the market been reacting?

US dollar

Looking at the US Dollar Index (USDX), we may get a better idea of how the USD has fared. The US Dollar Index measures the value of the USD against a basket of six other major currencies (EUR, JPY, GBP, CAD, SEK, CHF). The index moves higher when the USD gains strength against these other currencies, and vice versa.

The USDX closed at around 100.55 on 20 January 2017, when Trump was sworn in. Since that date it has dropped to 99.20, before rebounding to around 101.75. At the time of writing, it is trading around 101.63.

Was it the Trump effect?

He would most certainly love to say he is the reason behind the strength of the currency, but the fact is that on the same day, a bout of positive US economic data was released. Also on that day, Federal Reserve Chair Janet Yellen testified on monetary policy and raised expectations for an interest-rate hike in March, which may have had a positive effect on the USD.


Any trader worth their weight in gold would tell you that the yellow metal is a safe haven and a hedge against inflation. A safe haven is an asset which investors flock to for safety when there is uncertainty in the markets. Trump’s win in November pushed gold prices higher before collapsing to around $1,123.36 OZ. Since the beginning of the year, however, it has managed to bounce back and is currently trading at around $1,235.60 OZ.

Was it the Trump effect?


“It is a consensus of opinion that political risk, which has risen considerably since Trump’s election, has made gold shine to many investors, and talk of uncertainty is keeping the yellow metal in demand. Some could argue that this is simply a repeat of 2016, when gold also started on a bull run, however it seems more likely that Trump has played a role in this one.”

James Trescothick, Reputation and Education Manager, easyMarkets

The stock market

The stock market, unlike gold, tends to rise when there is risk appetite and opportunism. Since the November election results, the stock market has seen gains, and the momentum has continued, with the SP500 trading at an all-time high.

Was it the Trump effect?

Well, Wall Street has actually referred to these recent highs as “the Trump rally,” which started in November. You may also credit a healthy labour market and expectations of an upcoming rate hike in the US for this move. However, it does seem that the market is also pricing in that Trump will push through corporate tax reforms and cut regulations, which in turn will boost US business.

He may or may not go through with the reforms. Nevertheless, it’s safe to say he has played a role in market movements over the past 30 days, and wherever you stand on the new POTUS, these past 31 days have not been without their fair share of action!

For further details, visit www.easymarkets.com, email pr@easymarkets.com or call +44 203 1500 748.


Risk Warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you fully understand the risks involved and do not invest money you cannot afford to lose. Please refer to our full risk disclaimer. Easy Forex Trading Ltd (CySEC – License Number 079/07).

The political wildcard: What is Trump’s US presidential nomination doing to financial markets?

The political wildcard: What is Trump’s US presidential nomination doing to financial markets?

United States
  • Donald Trump highlights benefits of weaker dollar
  • Wall Street in the process of recording 4th consecutive quarter of earnings decline
  • S&P 500 Index has averaged 9.7% CAGR under Democrats and 6.7% under Republicans
  • easyMarkets warns against Trump’s ‘wildcard factor’ on financial markets

Stocks, currencies and bonds are all sensitive to political change and a US presidential election is always a period of uncertainty for the markets. So how are the various markets likely to be impacted by the run up to the 2016 US presidential election, which takes place on 8 November?

Nikolas Xenofontos, Director of Risk Management at leading online trading services provider easyMarkets, believes that the wildcard factor of Donald Trump in this year’s election could have a big impact on the US economy. He explains,

“The rise of an anti-establishment candidate like Donald Trump speaks volumes about the desire for change in the US. Party-line politics have been left behind, with Trump standing out as a self-financed candidate who isn’t beholden to any special interest groups and doesn’t plan on following the usual script that most successful candidates use to reach the White House. This independence is both refreshing and worrying when it comes to the financial markets, as there are a lot of unknown factors at play, which could serve to make investors nervous over the coming months.”

Donald Trump’s musings on economic change and policy, should he become president, have already caused a stir. He has floated the idea of replacing Janet Yellen as Chair of the Federal Reserve and has highlighted the benefits of a weak dollar, commenting,

“While there are certain benefits, it sounds better to have a strong dollar than it actuality it is.”

Currency intervention is a risky business. A weaker dollar could benefit US multinationals, which have been struggling of late in the face of the greenback’s strength: Wall Street is in the process of recording its fourth consecutive quarter of earnings decline, in the face of weak international demand. However, currency intervention could easily prompt countries with a history of intervention, such as Japan, China and South Korea, to introduce additional measures to make their currencies more competitive.

In true establishment fashion, Mrs. Clinton has refused to make explicit comments on how to handle currency devaluation.

The US’s international trading position could also be under threat from Donald Trump’s approach to trade deals. His hardball approach includes large tariffs on imports, which could lead to both rising prices for consumers and tariff retaliation from other countries, making US exports less attractive. Trump’s planned major overhaul of US-China trade relations is also likely to cause a shift in the status quo. He has commented that he is not, “too afraid to protect and advance American interests and to challenge China to live up to its obligations.” However, the businessman has also promised to “win more” deals and successful negotiations certainly have the potential to strengthen the US’s trade position.

The uncertainty created by an upcoming election often weighs most heavily on stocks. Uncertainty is the bane of the financial markets, and investors react in unpredictable ways when they’re worried about the future. Investors are already wary of healthcare stocks, which Donald Trump’s repeatedly mentioned repeal of the Affordable Care Act could throw into a tailspin.

Hilary Clinton, as the establishment candidate, certainly has the backing of Wall Street, which has provided her with huge donations in support of her candidacy. She has said nothing that would be considered risky to the stock market and the support of Wall Street indicates a strong preference from financiers for the status quo, rather than the unknown.

However, it’s also a possibility that the huge corporate tax cuts proposed by Donald Trump could bolster US companies’ profitability and thus support stocks. John Stoltzfus of Oppenheimer comments,

“Markets always worry when uncertainty is a factor, and it is unclear which policies Trump would execute if elected. However, I’d expect him to enact policies that reflect his ability to successfully negotiate with people. He relies on good relationships with politicians and Wall Street, and I don’t expect that to change.”

Trump’s aggressive tax cuts could actually lead to massive growth in US GDP, with higher wages and more plentiful jobs. On the flip side, the tax cuts could reduce federal revenues by more than $10 trillion, leading to a massive deficit that could result in creditors demanding higher interest rates on US bonds. A promised overhaul of the tax code, including a one-time repatriation of corporate profits held overseas at a much lower tax rate could be extremely beneficial. The last such repatriation amnesty, in 2005, saw the dollar rise by 5%.

While it’s impossible to see the future, history has shown that US stocks perform better under Democratic administrations. The S&P 500 Index has averaged a compound annual growth rate (CAGR) of 9.7% under Democratic regimes versus 6.7% under Republican ones, according to S&P Global Market Intelligence figures. easyMarkets’ Nikolas Xenofontos adds,

“Analysis has also shown that the third year of a president’s office normally yields the highest average return. That means that those looking to the future can expect a strong US economy in 2018 and 2019, if historical patterns are borne out, regardless of who is elected this November. Having said which, the wildcard factor of Donald Trump really is something to watch – his success so far is shifting the fundamentals of US politics and nothing is certain as this election progresses!”

For further details visit www.easymarkets.com, email pr@easymarkets.com or call +44 203 1500 748.

Risk warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you understand fully the risks involved and do not invest money you cannot afford to lose. Our group of companies through its subsidiaries is licensed by the Cyprus Securities & Exchange Commission (Easy Forex Trading Ltd- CySEC, License Number 079/07), which has been passported in the European Union through the MiFID Directive and in Australia by ASIC (Easy Markets Pty Ltd -AFS license No. 246566).

London versus the world! What can you get abroad for the price of an average property in the capital?

London versus the world! What can you get abroad for the price of an average property in the capital?

Portugal Spain United States , , ,
  • Average London house price is £514,097 (Gov.uk)
  • This is enough for 3 detached villas with pools in Spain, with €80k change (Kyero.com)
  • Or 2 5-bedroom resort homes with pools in Florida (Ideal Homes International)
  • Cliff-top townhouses with infinity pool in Mallorca also an option (Taylor Wimpey España)

According to the UK government’s December 2015 House Price Index, the average property in London now costs £514,097. Based on a quick Rightmove search, £514,097 is enough to purchase a new build one bedroom flat in Newham, a two bedroom flat in a converted house in Acton or a four bedroom mid-terrace house in Tottenham in need of some serious modernisation.

But what could you get for the same money overseas? £514,097 is worth just over €656,151, or USD $743,053, at today’s exchange rate, which opens up a wealth of property options to those looking to buy on the continent or even further afield.

Chris White, Founding Director of Ideal Homes International, explains,

“There are some fantastic bargains to be had when it comes to overseas property at the moment. Portugal and Spain are offering incredible value for money and are just a short hop on a plane from the UK, making them ideal locations for second homes or investment properties that you want to keep a close eye on. For fans of the US, Florida is also offering some serious bargains and is a perennially popular destination thanks to its winning combination of sun, sea and theme parks.”

In Portugal, €650,000 is enough for a four/five bedroom villa in the hills at Soalheira, 10 minutes from the beaches and golf courses of Vilamoura and just two minutes from the town of Loulé. The villa comes complete with swimming pool, Jacuzzi, sauna, pergola sunbathing area, pool house and gardener’s bathroom, two double garages, ocean views, grill house with sink, fridge and BBQ, cinema room, wood burning fire and under-floor heating in the two bathrooms. A far cry from a run-down terraced house in Tottenham!

For beach bunnies, the Spanish island of Mallorca is the ideal location. There, €625,000 will buy a premium frontline townhouse with incredible sea views, close to the golf courses and marina of Porto Cristo. There are just seven spacious three bedroom townhouses on the Cala Magrana Mar development, from leading Spanish homebuilder Taylor Wimpey España, which also benefits from a communal infinity pool and sunbathing area, designer fixtures and fittings and the latest security features.

Another option for those with €650,000 to spend is to invest in more than one property, which is easily achievable for this budget in both Portugal and Spain. Martin Dell, Director of Spanish property portal Kyero.com, comments,

“It’s staggering what you can get in Spain for the price of an average London property. Those looking for rental investments can pick up a whole string of properties in idyllic coastal locations for that kind of money.”

In the pretty seaside town of Javea, for example, detached villas with pools can be bought off plan for £189,800, with scope for the buyer to personalise the layout, with the build completed within 5-7 months. Instead of a one bedroom flat in E16, a buyer could pick up three of these villas and still have €80,000 left in his pocket.

Over in America, a buyer can easily pick up two five bedroom villas with pools in the hugely popular Kissimmee area of Florida for $743,053, the equivalent price of the average London home. Resort homes with screened in pool and spas in gated communities just a few miles from Walt Disney World are available for between $350,000 and $450,000. Certainly food for thought for all those thinking about buying a home in London at the moment!

For more information please contact:

Ideal Homes: 0800 133 7644, +351 289 513 434, www.idealhomesinternational.co.uk or www.idealhomesportugal.com

Taylor Wimpey España: +44 08000 121 020 or www.taylorwimpeyspain.com. Those residing outside of the UK should call 0034 971 70 69 72.

Kyero.com: www.kyero.com

16 top tips on buying a home overseas in 2016

16 top tips on buying a home overseas in 2016

Portugal Spain United States
  • Fall for an area, not an individual home
  • Know what you want BEFORE you visit
  • Think about what you will want in the future, as well as what you want now

The arrival of New Year provides a chance to take stock, make plans and look to the future with a positive frame of mind. For many, this will include the excitement of finally planning to buy their dream home overseas, providing the perfect antidote to the months of grey, chilly weather on offer in the UK.

Whether it’s a detached villa with pool on Disney’s doorstep in Florida, a stylish apartment close to the beach in Spain or a perfectly located country retreat in Portugal, the overseas property market is awash with great value properties for those who know where to look.

Chris White, Founding Director of Ideal Homes International, comments,

“We’re predicting great things for the overseas property market in 2016, with Spain and Portugal, the US and Cyprus all appealing in unique ways to buyers from the UK. We would always advise buyers to be cautious though, particularly if they haven’t bought overseas before – it’s really important to do your homework and buy through a trusted and reputable company.”

In that vein, Chris and his team have put together their 16 top tips on buying a home overseas in 2016, to help buyers turn their dreams into reality.

The Ideal Homes International 16 top tips on buying a home overseas in 2016

  1. Investigate on the internet – research potential areas thoroughly, rather than individual properties. Find out about local amenities, from beaches to restaurants, based on your priorities. Think about how those priorities may change in the future as well – a holiday home bought this year could serve as a retirement pad later on, so what facilities would you want on hand then? Don’t fall in love with a particular property until you know the location is right for you!
  2. Use an agent with form – opt for an organisation with a good track record. Make sure they have been in business for some time and have a long list of satisfied customers happy to speak about their experiences.
  3. Budget carefully – buying overseas isn’t just about the property price. Be aware of the buying costs like fees and local taxes. These can vary hugely from country to country, so do your research and budget accordingly.
  4. Plan a trip – once you’ve identified the places you like on the internet, hop on a plane and check them out for yourself. You will quickly be able to get a feel for whether or not a place is right for you and a few hundred pounds invested at this stage can serve extremely well when it comes to finding the perfect location for your new home overseas.
  5. Know what you want BEFORE you visit – think about how many bedrooms you need, whether proximity to the beach or a local golf course is important to you, whether you simply must have your own pool and whether the local supermarket can be reached on foot or by car. Whatever your preferences, have them firmly fixed in mind before you visit – and be sure that your agent understands them too. This will ensure that he/she is able to show you properties that perfectly suit your requirements and avoid wasting time spent touring unsuitable homes.
  6. Think about the journey – work out the journey from your current home to the area in which you plan to purchase. What are the flight times and costs like? Is there just one airline that flies into the local airport or several? Can you hire a car easily upon arrival if you need to? These factors will impact on how relaxed you are by the time you arrive at your overseas property each and every time you visit, so think the journey through in detail.
  7. Find a reputable lawyer – this is one of the most important elements of buying a second home overseas. A good agent should be able to recommend a reputable lawyer, or you can do your own research on the internet and by speaking to others who have bought property in the area. Chat on the phone with the lawyer and meet him or her when you visit – test their knowledge and be sure to choose someone you are comfortable with.
  8. Think about money matters – once you’ve bought your property, you will need to get money out to that country regularly in order to pay bills, take care of maintenance issues and so forth. Look at what you need to do to set up a local bank account and plan to do this as early as possible in the process. Bear in mind that many overseas banks also have a branch in London where you can take care of some of the initial paperwork should you need to do so.
  9. Remember the insurance – before you commit to purchasing a property, check that it is insurable and at a reasonable rate. If the area that you like the look of is prone to flooding or sink holes then it might be time to look elsewhere.
  10. Ask about hidden requirements – speak to your agent and conduct your own research online to ensure that you know everything you need to. In Portugal, for example, you need a fiscal number in order to purchase a property. You can get one quickly and easily from the local Finanças department for a small fee – or you can appoint a lawyer to take care of this on your behalf.
  11. Consider other significant expenses – what other expenses might your property purchase give rise to? One of the most commonly overlooked items is the need for a car, so think about whether you can access your new home on public transport, whether you will pay for a hire car each time or whether you would prefer to purchase a car of your own overseas.
  12. Is the property just for you? – if you plan to rent your property out as well as using it yourself then be sure that it appeals to a wide range of holidaymakers. Neutral décor and access to a pool can make a big difference to the number of people choosing your holiday home over another one.
  13. Speak to the experts – join some online forums and Facebook groups and chat to those who have already purchased in the area you like. Even better, find people who have moved fulltime and benefit from their experiences of local life.
  14. Know the market – understand price trends in the country and region you like in order to know whether or not your expectations are realistic based on your budget. Knowledge of local prices will also help you to gauge whether you are paying over the odds or picking up a real bargain.
  15. Think about maintenance – unless you are planning a permanent move, you will need to consider how best to maintain your property from afar. An isolated villa might be your dream holiday home, but an apartment on a managed condominium might present far fewer headaches in terms of regular maintenance, particularly if you plan to rent it out as well as use it yourself.
  16. Use an agent who does it all – find an agent you trust and who can offer you the whole package. They will be able to support you with every step of the process, from finding a reputable lawyer to arranging an inspection trip. This can often be by far the quickest and cheapest approach – and also the least hassle!

For further details call Ideal Homes International on 0800 133 7644 or +351 289 513 434, email info@idealhomesinternational.co.uk or visit www.idealhomesinternational.co.uk.

10 years on, the overseas property market resets itself

10 years on, the overseas property market resets itself

Cyprus Portugal Spain United States World ,
  • Portuguese property prices due to rise 5% p.a. for next 5 years (RICS/Ci)
  • Florida property values up 8.2% over past year (Zillow)
  • Portugal, Spain and Florida are hot picks for 2016 (Ideal Homes International)

Over the past decade, the landscape of the overseas property market has changed vastly. Property entrepreneur and Founding Director of Ideal Homes Portugal and Ideal Homes International Chris White has been selling property through the good times and the bad. After a turbulent 10 years, he believes the overseas property market has finally reset itself – and that now is the time to look to the future.

In Portugal, where Chris White is based, the market crashed spectacularly following the events of 2006/07, along with residential real estate markets around the world. Lesser estate agents would have crumbled (many did) but Ideal Homes Portugal stuck with the market through the hard times and came out the other side even stronger. Today, the flourishing agency employs 35 staff, selling properties across the Algarve as well as in the capital Lisbon.

Chris comments,

“There were some tough years in the middle of the past decade, but it’s wonderful to see the Portuguese property market back on an even keel again now. Prices look set to rise at a comfortable rate over the next few years. I’d say capital growth of 3-5% per year should be achievable for those who invest in the market during 2016.”

Data from the RICS/Ci Portuguese Housing Market Survey concurs. The August 2015 report suggested that prices would increase by roughly 5% per annum over the next five years. At present, a lovely two bedroom townhouse with private pool in Quinta do Lago can be picked up for €375,000.

Spain, as well as Portugal, has seen its property market reset itself over the past decade, although prices in Spain have been slower to recover. For buyers in 2016, this presents an excellent opportunity, according to Ideal Homes International’s Chris,

“Prices are rising in Spain, but many areas are still priced below their peak. There aren’t as many opportunities there as there were a year or two ago, but Spain is certainly still a good bet if you’re looking for a real estate market that has the potential to keep expanding over the next few years. The Costa Blanca would be my particular tip for those looking for a second home in the sun that can double as a savvy investment.”

At Orihuela, two bedroom/two bathroom off plan apartments are available from €129,900. Due for completion in December 2016, the apartments will each feature two large terraces, as well as community gardens, sea views and two large swimming pools (one heated).

Florida is another area that’s now back in the game, according to Ideal Homes International. A modern, four bedroom townhouse in Kissimmee, ideally located for access to Walt Disney World, costs just $285,000 (€252,000). Part of an exclusive gated community, the home includes a private pool area, screened in patio and comes fully furnished.

Prices in Florida have risen by 8.2% over the past year, according to Zillow, while data from the National Association of Realtors in June 2015 showed the US market passing its 2006 peak to reach record highs.

Back in Europe, the other country that Chris White of Ideal Homes International has flagged up for attention is Cyprus. Chris comments,

“Cyprus is an interesting prospect as a place to buy a holiday home in 2016. The market there has been incredibly quiet there this year and we don’t expect huge increases in prices over the next 12-24 months. However, what Cyprus does have to offer is fantastic value for money. If you’re looking for somewhere with great weather where your money can go a lot further, then Aphrodite’s isle is an excellent choice.”

As an example, a two bedroom villa in Konia, on a small complex of just six homes with a shared pool, can be picked up for €149,000.

For further details call Ideal Homes Portugal on 0800 133 7644 or +351 289 513 434, email enquiries@idealhomesportugal.com or visit www.idealhomesportugal.com.

Charlotte emerges as 2016 property hotspot

Charlotte emerges as 2016 property hotspot

United States
  • Charlotte ranked 3rd out of all US cities (PWC)
  • City is one of ‘best places for business and careers’ (Forbes)
  • Charlotte flagged as top 2016 property investment hotspot (Property Frontiers)

Charlotte, North Carolina, has emerged as one of the key property hotspots in the US for 2016. The thriving metropolis has been ranked third out of the nation’s cities in PWC’s Emerging Trends in Real Estate United States and Canada 2016.

Known as the Queen City, having been named for Charlotte of Mecklenburg-Strelitz, who became Britain’s queen consort the year before the city was founded, Charlotte is the second largest city in the south-eastern US and the second largest banking centre in the country. Bank of America has its headquarters there, while Wells Fargo uses the city as the base for its east coast operations.

With a healthy mix of service sector companies, industry and technology, Charlotte has a strong economic base as well as a thriving sports and social scene. The city has been on the rise for some time. From 2000-2008 it was ranked the 60th fastest growing city in the US. Last year, it had shot far enough up the ranking to take the number three spot, according to Census data. In 2013, the city received a further boost, with Forbes listing it as one of the Best Places for Business and Careers.

Now, the PWC Emerging Trends in Real Estate 2016 report has once more shone the spotlight on Charlotte’s potential, highlighting it as one of the country’s most dynamic real estate hotspots. Ray Withers, CEO of specialist property investment company Property Frontiers, comments,

“We’ve been involved in Charlotte’s property market for some time, as demand for good quality rental accommodation is high both within the city and the surrounding area. Investors from around the world are keen to pick up buy-to-let property in the US right now and Charlotte is one of the key urban areas offering the perfect combination of good value purchase prices and healthy demand from tenants.”

Property Frontiers is already offering investors the opportunity to purchase buy-to-let apartments at Chandler Oaks, just over an hour from Charlotte in the South Carolina city of Gaffney. The fully tenanted homes are priced from $48,671 for a one bedroom apartment. More than 70% of the properties have already been snapped up by investors keen to benefit from the liquidity of the US residential market.

With investor demand so strong for property in the area – and likely to become even more so in light of the PWC report – Property Frontiers has sourced a further development, within the Charlotte Metropolitan Area itself. CEO Ray Withers confirms,

“We are very shortly due to launch a fabulous opportunity at Circle Oaks Village, just 20 minutes from Charlotte, allowing investors to tap into the city’s real estate market and to be part of the future of one of the most active and exciting locations in the US. Property Frontiers has been planning the launch of this development for some time and it’s excellent that the just-published PWC report has confirmed that once more we are at the forefront of where investors want to be when it comes to global buy-to-let property markets.”

Circle Oaks Village is a collection of refurbished and fully tenanted apartments within easy reach of local business districts, schools and recreational facilities. The one, two and three bedroom apartments are spread across 29 buildings, on 13 acres of land. Investment is from just $77,727, with a management company contribution of 40% paid on closing, giving the management company the right to lease the property for the next five years. This means an investment price from only $46,636, with minimum guaranteed returns of up to 18.08% NET on capital invested for the first five years.

For further details, visit www.propertyfrontiers.com or call the team on +44 1865 202 700.

Planet property: Global house price report highlight’s world’s real estate hotspots

Planet property: Global house price report highlight’s world’s real estate hotspots

Germany United Kingdom United States
  • Global house prices rising at 4.7% per year (Economist House Price Index)
  • UK, US and Germany highlighted as real estate hotspots (Property Frontiers)
  • Output rising across entire UK construction sector (Markit/CIPS UK construction PMI)

The Economist House Price Index is one of the most important reports when it comes to providing a snapshot of the health of the world’s real estate markets. The latest report, released in October 2015, paints a largely positive picture of the planet’s property. Of the 26 markets studied, prices are rising in 21 of them, at a median pace of 4.7% per year.

Knowing where to invest

“Data such as this is key when it comes to knowing where to invest,” comments Ray Withers, CEO of specialist property investment company Property Frontiers. “It’s encouraging to see that the UK, the US and Germany are all enjoying sustained price rises. It shows how sensible our clients have been in investing in buy-to-let properties in those countries.”

Looking at the UK

House prices in the UK have been rising since Q2 2009, albeit with a few bumps along the way, according to the Economist’s report. Nationally they’ve risen by 11.5% in Britain between then and Q4 2014. The new-found confidence in the market has seen construction pick up pace, with the latest Markit/CIPS UK construction PMI reporting rising output across all parts of the industry in September 2015 – the 28th month in a row that the sector has been creating jobs. All of which is great news for property investors looking for a stable market.

One area of the UK that is firmly on buy-to-let investors’ maps is Manchester, and in particular Salford Quays. The area is booming and developments like Custom Quay, where the 60 one and two bedroom duplex apartments are available for investment from £127,000 with 8.4% expected yield, are attracting investors keen to be a part of the city’s bright future.

Heading across the pond

Over in the US, the figures paint a different picture, but one that is equally interesting from an investment perspective. Though prices have broadly been rising since Q1 2012, they remain some 22.4% below their peak value in 2006. For property investors, this means the chance to invest in real estate that could well increase in value at quite a pace over the years ahead.

At Chandler Oaks in South Carolina, just 45 minutes from the huge financial hub of Charlotte over the border in North Carolina, the potential for returns is certainly exciting, with investment from $48,671 and a minimum of 11.4% gross yield for two bed apartments. Fully tenanted and fully managed by a local property management company, the development is proving extremely popular, with 70% of the apartments already snapped up.

Buy-to-let in Berlin

Back in Europe, Germany is another country that is the focus of buy-to-let investors’ attention. The market in Berlin has some interesting characteristics, including rising rents (even with rent controls in place) and low property prices. Stadtpark Steglitz is a collection of studio, one, two and three bedroom apartments spread across three buildings in the south west of Berlin. Investment prices start from €109,000, with gross yields up to 5.6% realistically expected.

According to the Economist’s House Price Index report, home values in Germany were largely immune to the global financial crisis that started in 2006/07. In fact, prices there have remained fairly stable since the mid-1990s. It is only since around Q1 2009 that they have begun to rise steeply. Between then and Q4 2014, house prices shot up by 22.8% in Germany, delighting those who had already invested in property there and causing other investors to pay cities like Berlin some serious attention.

For further details, visit www.propertyfrontiers.com or call the team on +44 1865 202 700.

Value of foreign investment in US homes rockets, latest report reveals

Value of foreign investment in US homes rockets, latest report reveals

United States
  • Value of US home sales to foreign buyers jumps 13% (NAR)
  • Currency fluctuations in Europe pushing investors to the US (Property Frontiers)
  • Chinese buyers now top list of foreign investors in US (NAR)

According to the National Association of Realtors (NAR), around 4% of US homes (209,000 houses) were bought by foreign buyers between April 2014 and March 2015. The figure represents a 10% drop over the previous year, due to the strength of the dollar. However, while the volume of purchases by overseas buyers may have diminished, the value has shot up by 13%, from $92.2 billion in 2013/14 to $104 billion in 2014/15.

So, who’s buying in the US?

For the first time, buyers from China have topped the list of foreigners buying up US real estate, knocking the Canadians off the top spot. It’s something that those in the industry have expected for several years, as Ray Withers, Chief Executive of leading property investment specialists Property Frontiers, explains,

“We’ve seen a growing trend of Chinese buyers purchasing US real estate for several years. The NAR’s 2014/15 Profile of International Home Buying Activity has shown they are now not only the largest purchasers by volume (at 16%), but also by value, with an average spend of $831,300. As a group, Chinese buyers like high end investment properties in prestigious locations, so there’s a lot of focus on cities like New York and LA, though their interests extend right the way across the US.”

Canadian buyers still accounted for 14% of homes bought by foreign buyers during 2014/15. Buyers from Mexico, India and the UK also accounted for substantial proportions of the overall number of houses purchased.

A stable base

“With currency wobbles in Europe, the US provides a stable playing field for investors,” continues Withers. “The dollar may be strong, but in an uncertain market that can be a positive attraction for many investors. It’s about playing the long game, not making a risky overnight profit that could backfire significantly.”

Withers cites Chandler Oaks in the South Carolina city of Gaffney as an example of what investors are looking for from the US market. The development consists of one and two bedroom apartments designed for students and young professionals to rent. With rents on the rise in the US, this type of investment is much in demand – 70% of the apartments at Chandler Oaks have already sold out. Rents in the US have risen 3.7% year on year, with Zillow’s March data showing that annual rental growth exceeded annual house price growth in 17 of the largest metro areas of the US during March.

Rising rents are good news for investors looking for strong yields. At Chandler Oaks, a minimum of 11.4% gross yield is offered for the two bedroom apartments, thanks to a contract with a local college that will provide tenants to May 2019. Underwritten income of 8% NET is also in place until the start of 2020.

These strong yields are one reason that foreign buyers look to US, as they can generate greater income than they could on similar properties back home. Local property restrictions also come into play – in Beijing, the maximum property ownership limit is two homes, even for investment purposes, hence the cash purchase of so many homes in the US.

Whatever their individual reasons, investors turning to the US are looking for stable investment opportunities with healthy returns, exactly like Chandler Oaks. Investment there is available from $48,671 for a one bedroom apartment.

For further details, visit www.propertyfrontiers.com or call the team on +44 1865 202 700.