Investment watch: buyers go back to portugal
• Property in Madeira most popular on TheMoveChannel.com in Q3 2013
• Demand still strong for student property, accounting for 3 of September’s top 10 listings
Buyers are heading back to Portugal, according to TheMoveChannel.com’s latest research. The portal’s Investment Watch report shows that a property investment in Madeira received the highest number of enquiries on the site in September 2013, over three times more than the month’s second most popular listing.
Promising up to 128% returns over five years, demand for the property scheme outstripped other high yield investments, including a luxury hotel room investment in Germany. The Bavarian runner-up offers 9% NET yields in the first year, but generated just one-third of the Portuguese listing’s interest, as investors sought the biggest returns for the smallest cost.
High returns, low prices
Indeed, only one of the 10 most popular listings on TheMoveChannel.com in September 2013 is a lifestyle property: a boutique golf resort in Tuscany. It is also the only listing in the top 10 to have an asking price of over £65,000, advertising three-bedroom homes from £575,518.
The rest of the top 10 are all affordable investments. The most expensive is a luxury apartment in Devon, with a price of £64,000. However, the UK listing also boasts the second highest returns after the Madeira investment: NET yields of 15.6% were enough to earn it fourth place in the Investment Watch chart.
Student staying power
With university terms in full swing, the most popular type of investment in September was student accommodation, which accounts for three of the top 10 listings on the site. The sector has consistently been in demand among investors in recent months, offering between 8% and 9% returns for £51,000 and under.
Investors are increasingly looking to regional UK cities for the strongest opportunities: the three most sought-after student listings are located in Sheffield (third place), Birmingham (fifth place) and Bradford (eighth place).
Demand is still strong for more traditional investments, though: a 13% NET buy-to-let investment in Ohio, USA, received the tenth highest number of enquiries, and investors were also willing to consider a fractional ownership scheme in Cape Verde (ninth place) with a return of 7% for two years plus five weeks’ personal usage. Alternative investments also continue to draw attention, with a coconut plantation in Brazil climbing into sixth spot.
Popular Portugal
Madeira, though, was the main attraction. The strong demand in September marks a growing interest in Portugal’s real estate. According to TheMoveChannel.com’s Top of the Props report, demand for Portuguese property tripled in July 2013 month-on-month and has stayed steady since, as buyers overcome any financial uncertainty to take advantage of low prices. Indeed, the property scheme in Madeira was the most popular listing on TheMoveChannel.com in the third quarter of 2013.
According to First Capital Wealth Limited, which manages the Madeira investment, Madeira’s micro-economy has resisted the wider economic storm more than mainland Portugal. With 67% of Madeira's land protected and undeveloped, the value of land with planning permission is relatively high, which helps to generate such strong returns.
First Capital Wealth Limited Director Hugh Edwards comments: “Madeira is one of the few places in Europe where property has held its value and even seen good increases during the economic downturn, making it possible to provide greater returns and huge expectations for investors. By specialising in private clients, we understand that security is at the heart of every client's fundamental criteria and with this in mind, we only choose platforms that can provide this reassurance.”