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I know South Afica isn't in Asia but it is close enough.
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I know South Afica isn't in Asia but it is close enough.
South Africa looks risky
23rd Aug 2005, a Tuesday
South Africa is currently a high-risk investment prospect, with capital gains growth, which hit 24.6% last year, likely to slow considerably over the coming months, warn Assetz.
Rental yields in South Africa have fallen over recent months from 10% to as low as 4.5 - 5%, as a result of house prices doubling.
Now, with high mortgage rates of 9%, rental income will fail to even make a profit for investors in South Africa, leaving mortgage and management costs to be covered by the investor's own pocket.
Total returns on cash invested currently stand at 40%, but with a hefty deposit of 50% of the purchase price required, along with the prospect of negative rental profit and slowing growth rates, South Africa is currently a high-risk investment zone.
Stuart Law, Managing Director of Assetz comments: "Trouble is looming in South Africa, with an oversupply of high-density apartments combined with a decrease in demand for rental space over the last few months.
"Florida also remains a high-risk zone, with interest rates rising fast in an effort to cool the housing market, which is likely to lead to a serious faltering in property price growth."
France looks likely to face a slowdown in capital gains growth over the next year, but it remains the strongest investment prospect, said the group. With a minimal deposit of only 15% required along with stable yields of 7%, France offers significant returns of 92% on a small initial outlay.
The August Property Investment Tracker has been expanded to incorporate five new countries of significance to the British investor: South Africa, Portugal, Poland, Italy and Greece. In the latter, house prices have remained at the same level for the past year, leaving investors to rely on a minimal 4.2% rental return. However, prices do look set to rise over the next few months, paving the way for eventual realignment with the Cretan property market, which independently has enjoyed greater prosperity in recent years.
23rd Aug 2005, a Tuesday
South Africa is currently a high-risk investment prospect, with capital gains growth, which hit 24.6% last year, likely to slow considerably over the coming months, warn Assetz.
Rental yields in South Africa have fallen over recent months from 10% to as low as 4.5 - 5%, as a result of house prices doubling.
Now, with high mortgage rates of 9%, rental income will fail to even make a profit for investors in South Africa, leaving mortgage and management costs to be covered by the investor's own pocket.
Total returns on cash invested currently stand at 40%, but with a hefty deposit of 50% of the purchase price required, along with the prospect of negative rental profit and slowing growth rates, South Africa is currently a high-risk investment zone.
Stuart Law, Managing Director of Assetz comments: "Trouble is looming in South Africa, with an oversupply of high-density apartments combined with a decrease in demand for rental space over the last few months.
"Florida also remains a high-risk zone, with interest rates rising fast in an effort to cool the housing market, which is likely to lead to a serious faltering in property price growth."
France looks likely to face a slowdown in capital gains growth over the next year, but it remains the strongest investment prospect, said the group. With a minimal deposit of only 15% required along with stable yields of 7%, France offers significant returns of 92% on a small initial outlay.
The August Property Investment Tracker has been expanded to incorporate five new countries of significance to the British investor: South Africa, Portugal, Poland, Italy and Greece. In the latter, house prices have remained at the same level for the past year, leaving investors to rely on a minimal 4.2% rental return. However, prices do look set to rise over the next few months, paving the way for eventual realignment with the Cretan property market, which independently has enjoyed greater prosperity in recent years.
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