30 September 2016

Is this Europe's best value property?

Europe’s best value property?

In these days of low, if not negative, interest rates it’s quite a challenge getting a decent return on your capital and protecting it. Property is favoured by those who look to avoid the uncertainty of the stock market. But where to buy?

Most people look to their locality to buy property for investment. This can be a mistake as just because the market is near to you does not mean it offers the best prospects. This is particularly true nowadays with increasing concerns over the very high level of public and private debt underpinning most Western markets. Entry-level prices to buy property can also be very high, particularly in the UK where many people are being priced out of the market.

Buy property now the UK, Western Europe and North America and you could find the value of the asset crash when interest rates rise as they surely will have to soon. As property values in these countries are essentially based upon the availability of cheap credit, once that easy money disappears so do property prices.

So to protect from a market crash, it’s a good idea to seek out markets that are not dependent upon easy money. On one country that certainly isn’t is Ukraine. In 2008 the financial crisis swept a chilly breeze over Western property markets but inflicted a hurricane on Ukrainian’s. Interest rates zoomed up to 30% and nearly all mortgage holders were wiped out. This means that nowadays property prices in Ukraine are based upon people’s actual ability to pay in cash. This provides a high degree of inbuilt protection against interest rate rises.

The other bonus of the Ukrainian property market is overly cheap prices due to recent negative reporting about the country. We talked to a leading English financial journalist who’d visited the country recently. His impression from talking to people on the street is that the picture isn’t as gloomy as you might think. People are quietly determined to make improvements in their life and move forward. The trouble from the “noisy neighbours” in the East serves to strengthen the sense of national identity and give them an incentive to improve the functioning of the country.

Now could be a very good time to buy, at a point before the wider market realises progress is being made in Ukraine. The country is particularly attractive if you have limited capital available.

Take this detached cottage that is sold with 2500 m² of land. It can be bought now for just $4900 (£3,750). Freehold. Good fertile land and an old-style but smartly presented home. The decimal point should really be moved one space to the right! Ref: C1548

And if you prefer a modern but very cheap city apartment, we’ve just found this one C1550, a 42 m² one-bedroom apartment in a new complex that will be completed in December this year. Near to Metro station, park and ideal for renting out at about $600 a month. Price only $39,900.

With mortgage holders all but squeezed out of the market, it’s hard to see how property prices could fall more, but easy to see how it could rise in the future when affordable credit becomes available again. Ukrainian property could well be a hedge against the coming 2008 recession act 2 that’s coming to a place near you soon. Once the credit bubble finally bursts in the West, as it has to eventually, you may wish you had some property in Ukraine.

Contact us for more information. We’ve been serving clients from outside Ukraine for over 12 years now and can provide an excellent level of support during and after the sale

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