Overseas Property Investment Don't Worry about Air Fares
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Paul Collins, editor of Buy Association has suggested that it may be prudent for British investors to look at building their portfolio with properties closer to home. He speculated that the rising fuel prices pushing up air-fares may cause holiday trends to change, with people driving or taking the train to their holiday destination.
Liam Bailey head of international research for overseas property specialists DSR had a different opinion:
"9 times out of 10 I completely agree with Paul Collins statements, but on this occasion not so much. If you are investing in property that you intend to holiday in yourself, then perhaps indeed it may be prudent to consider the high likelihood that air-fares will not stay as cheap as they currently are. But for pure investors the only consideration should still be where they can make the biggest gains for their budget, and that is often in emerging markets, which may or may not be outside tangible distance for alternative travel.
"The reason I say this is because the affluence of the population in emerging markets is rising, as well as the fact that emerging markets are currently pretty much grouped together as part of emerging regions, therefore in these markets regional tourism is a growing portion of the market and will quickly make up for any short-fall caused by reduced tourism from further afield. The short-term rental yield gap -- if there even is one -- will certainly not overshadow the higher potential for capital appreciation. A good example of this is Asia, and emerging markets like the Thai island of Koh Samui, where regional tourism has accounted for almost 100% of what is a massive industry."
DSR specialise in off-plan property in emerging markets, which without doubt offer the biggest potential for capital appreciation, and the chance to get in at an entry-level to cash in on generally expanding rental markets.
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