At PropertyGem we believe that over the short, medium and long term investment in the property markets of selected emerging economies will deliver capital growth significantly exceeding that in the UK and will help our investors achieve their financial goals.
In short, ask yourself the following questions:
Are you happy with your pension investments?
Are your ISA and equity investments really giving you the growth you need?
Are you on target to achieve your financial independence targets?
Will your current investments achieve the retirement capital/income you require?
Is your spare cash really working hard enough for you or simply paying fees to investment managers?
How will your UK property investments and equity investments perform if the UK economy slows down over the next 5-10 years compared to the last 10 years?
At PropertyGem, we believe strongly that not only should property be part of every investor?s portfolio, but property in high growth emerging markets is critical for investors to achieve their financial goals. In particular, the "New EU" countries of Central and Eastern Europe offer investors an historic opportunity to benefit from the wealth creation taking place in these new market economies. While the credit crunch and its economic repercussions are likely to result in slowing growth and stagnating property markets in the UK and most other Western economies, meanwhile the "New EU" countries such as Poland and Romania, continue to forge ahead. There has never been a better risk/reward profile for investing in these countries as investors can benefit both from higher capital growth than is available in the UK while safe in the knowledge that they are investing in countries that are subject to EU laws and regulations. Superior property investment returns in "New EU" countries are driven by:
Rapid Economic Growth (GDP) - GDP and income per head in Central and Eastern European countries is growing approximately 4x faster than the Eurozone average while GDP/capita is approximately a third of the Eurozone average. Since housing is a cost of living, rapidly growing economies leading to rising wages and salaries fuels rising property prices
EU Convergence - countries such as Poland, Romania and the Baltic region are playing catch up with the living standards that exist in Western Europe. Billions of Euros of EU funds are being spent to modernise the infrastructure in these countries (e.g. road and rail networks). Joining the EU expenditure is increasing amounts of private investment from Western companies who are confident they are now investing in more stable market economies that have a growing future and a young, well-educated population. All this inward investment creates jobs, local wealth and rising property prices
Supply Shortage - there is a shortage of suitable, modern housing in many Eastern European cities compared to the growing demand from the emerging middle classes there. Based on the current rate of construction and available land zoned for residential development, this shortage is likely to persist for many years to come. The rising wealth of purchasers coupled with a shortage of supply of desirable homes will continue to result in rapidly rising capital values. In Poland, for example, it is expected that this housing shortage will not be solved for up to 10 years
Introduction of Mortgages - increasing availability of mortgages enhances the local purchaser?s affordability. While mortgages are commonplace in the UK, in many "New EU" countries mortgages are a relatively new financial product only introduced in the last few years. Uptake of mortgages by local people is increasing fast from a very low base enhancing their ability to purchase new homes. However, the use of mortgages is still in its relative infancy in these countries compared to the UK providing plenty of scope for growth. As citizens take advantage of mortgages in ever greater numbers over the coming years, it will further provide an upward impetus to property prices, just as it has in the UK over the last 10-20 years.
Low Property Taxes - Property taxes and property transaction costs are much lower in the "New EU" countries than in many Western European countries, such as France, Spain or Italy. These lower costs support liquidity in the property market when it comes to the investor wanting to sell
What we are witnessing in the "New EU" countries of Central and Eastern Europe is history repeating itself. The same factors noted above have driven the property markets in countries such as Ireland, Spain and of course the UK (excluding the EU Convergence factor) over the last 10 years. This is now your opportunity to benefit from the growth potential of the latest entrants to the EU over the next 10 years.
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