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Investors still heading to France and Spain

31st March 2006 | back to article listings BACK    print this article PRINT

Emerging markets such as Bulgaria may be getting large amounts of publicity over their investment potential, but it appears to be the old favourites which remain top with investors.

According to a new study carried out by foreign currency specialist HIFX, March 2006 saw further demand in France and Spain from UK investors. The research found that together, the two countries made up almost half of all the currency transactions carried out by HIFX during the month.

With 43 per cent of the transactions being carried out by people buying in either France or Spain, the research reveals that there remain large attractions for investors in the two countries and as yet that interest has not been particularly dampened by the emerging markets.

HIFX's research also confirmed previous studies highlighting the fact that more people are now looking abroad for investment opportunities and a large minority are looking further afield, with Australia coming in as the third most popular place to buy a second home. Meanwhile, Bulgaria turned in another good performance in the market during March, coming in fourth in HIFX's league. People are still flocking to Bulgaria to invest in the emerging property development sector there, due to the fact that it is on the verge of entry to the European Union (EU). When that occurs in 2007, property prices in the country are expected to rocket even more quickly than at present.

Bulgaria accounted for ten per cent of the overall transactions carried out by HIFX during March and it is anticipated that the country will see a greater share of that money by the time it is granted EU accession next year.

So-called 'hot spot investors' are becoming more common in the UK and it is anticipated that this category of people, who are looking for property purely for investment purposes, will help to drive up the share of investment in Bulgaria.

However, the country has a long way to go before it manages to catch up with the property investment currently being poured into the more traditional destinations of France and Germany. That is because these two destinations have managed to remain popular with the growing number of people who want to use their investment as a source of funds during their retirement. This group are not yet persuaded by the opportunities offered by emerging markets because of the potential for a dip in such areas' inflation.

France and Spain have shown themselves to be reliable over many years and this kind of security is why they both remain such popular destinations for buy-to-let investors from the UK.

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