Buying abroad: Foreign fields

From Morocco to Montenegro, opportunities abound for those looking to extend their empires, writes Norman Miller
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The Independent Online


After decades behind the Iron Curtain, property prices in the former East Berlin have languished behind those in the rest of the city. Now, Berlin's booming economy has put the city in the investor spotlight.

Central flats start from as little as £40,000, although average prices are in the £70,000 to £100,000 range. The German tradition of renting (just 13 per cent of Berliners own their homes) means that properties are often sold with long-term tenants in place, providing rental security. Ten-year management deals are common, and typical yields are 5 to 6 per cent. Signs that the renting culture is changing offer hopes of good capital growth.

Well-maintained period blocks dominate over new-build. The best areas of the city include Charlottenburg, Schöneberg, Mitte, Prenzlauerberg and Friedrichshain.


While prices have leapt in its Balkan neighbours, Montenegro's property has lagged due to political links with troubled Serbia. With these now severed, Montenegro offers the beauty of Croatia for less. Montenegro is likely to gain EU membership in the not too distant future, and the financial benefits of that will drive capital growth. A gorgeous coastline and the striking walled city capital of Kotor are seeing tourism begin to flourish, boosting holiday rental prospects.

A studio flat at the Boka Bay resort costs from just £35,000, with two-bed villas available for £85,000. A seven-bed villa containing three substantial apartments costs £210,000.


On the north-western tip of Africa, just a dozen miles from Spain at its closest point, Morocco has seen tourism numbers triple since 2001. The ruling authorities are determined to attract investment by establishing a safe, sound infrastructure based on the Plan Azur and Vision 2010 initiatives. High-quality developments are being built in six coastal resorts with incentives to overseas buyers including rental guarantees and generous capital gains tax breaks.

Le Jardin de Fleur resort at Mediterranea-Saida offers a renewable nine-year touristic leaseback agreement and projected rental returns of between 7 and 11 per cent of purchase price. Companies in this market include Feltrim International, New Era Overseas and Gem Estates.

The vibrant city of Marrakesh is also seeing major rises. As well as traditional riads, Morocco Properties is offering a luxury resort development just three miles from Marrakesh. Flats start at £62,500, while riads are from £208,000, and 60 per cent mortgages and a management scheme are available. (0870 004 6042)


Property in Poland is an increasingly attractive investment opportunity for overseas buyers, and since Poland joined the EU in 2004, much of the red tape that used to surround the property market has gone. Strong inward investment, a growing economy and the forthcoming introduction of the euro add to Poland's appeal.

Annual capital growth in the capital Warsaw and the historic tourist city of Krakow has hit 30 per cent in the past two years. Incentives include zero capital gains tax if you keep a property for five years, or if you reinvest in another property within two years of the sale.

You can buy two-bed flats in cheaper areas of Warsaw for £50,000, though a prime central location will double that. In Krakow, a two-bed apartment in the Old Town recently sold for £72,000, though new-build apartments just outside the centre cost from £55,000.

North-east Brazil

Brazil looks the best of the more exotic property hotspots, with a booming economy complementing a glorious coastline and year-round sunshine. Property lending by Brazilian banks doubled last year, while north-east Brazil has become established as a holiday destination for Brazilian and US tourists as well as Europeans, with UK flights to Natal taking around eight hours.

The beach resort of Pipa, an hour from Natal, promises net rental yields of 10 per cent, according to developers Experience International. The complex offers luxury three-bed flats from £55,000 and three-bed villas from £120,525. Units include balconies, alongside a spa, open-air restaurant and 24-hour security.

A similar distance from Natal, the D'Santo Cristo Resort is a development by Bridge Property near the fishing village of Sao Miguel do Gostoso. Chalets and apartments are under construction, with off-plan prices from £34,000 to £200,000 and the first units ready in September 2008. (0203 102 5030); (01293 763 028)