Overseas Property Investment: Favour Established Growth Markets in 2009

I have read two reports this morning, one on a report into Cambodia's economy and property by the World Bank, and one on Vietnam property by Asia Property Report. Both said the same thing, that while economic growth is still expected at a much slower rate, the property market will be affected by the economic slowdown in the short-term, but show potential over the mid-long term.

The trouble is, nowhere is expected to grow over the short-term, but how do you predict mid-long term growth potential? The truth is property in almost every country is likely to see growth over the mid-long term, so where should property investors look in 2009?

I believe the best bet is to invest in markets that saw the most rapid property value growth during the boom. I recommend Cambodia and Vietnam, firstly, because their potential for internal property sales has hardly been tapped into at all; with growth being fuelled almost solely by foreign property investors. In other words demand for high quality property still far outstrips supply' which is why Dubai is not mentioned above.

In fact, both the countries mentioned above are reminiscent of Britain when it began growing into an industrialised nation, with three and four generations of families often sharing homes, and major growth in industrial sectors, i.e. 28% growth in the textiles sector (Cambodia). As these nations grow into great industrialised nations, more and more people will be able to afford to buy their own home, and there is definite investment potential in affordable housing schemes to meet this rising demand.

But I recommend these markets most of all because they have proven their ability to turn increased international activity, foreign investment and tourism into exceptional economic growth, followed by similarly exceptional and sustained growth in property values.

Not every country can translate economic strength into property value growth, people have been forecasting mid-long term growth for Berlin property for years, and still predict it now, the kind of growth being predicted has yet to begin, and the predictions have now gone on so long, that I am going to say who knows if growth will begin in the mid-long term. Because of the credit-crunch growth may take 20 years to begin. That said, Less Berliners own their own home than any other developed nation, if the government can change the renting mindset it could kick-start a Berlin property boom, but this is hard to predict.

China has recently displayed exceptional economic growth but comparatively, property values there have not grown by as much as they have in its two Asian counterparts mentioned above, though you could say that it because of the political landscape in China, governmental human rights abuses, you can still get a high quality 1 bedroom apartment in Shanghai for €72,000. That said, China's population size means demand there also outstrips supply by a long way, and the population continues to grow, therefore China should be considered by investors in 2009.

Then there's Albania, it showed an impressive economic performance, and saw a lot of new development, but property values did not grow as they did in the countries mentioned above, or even by the same levels as was seen in neighbouring Montenegro. But again Albania is still likely to grow in the mid-long term, it remains economically robust and growing internal incomes will cause rising demand for quality properties, and the property ladder will begin.

There are other countries in the world where mid-long term growth is a fairly safe bet, because of growing internal demand, increased foreign investment possibly because of infrastructure improvements, and/or just a readily available finance, and a sensible approach to development throughout the boom times.

In fact it is undeniable that property values in most countries will grow given enough time. Investors should do in-depth research into where is likely to grow first, where is likely to grow quickest, and where offers the right investment for their needs.