Wednesday, December 18, 2013

A Snapshot of International Real Estate Prices.

We spend a lot of time focusing on housing prices in the United States – and rightfully so with the roller coaster we’ve seen over the last 10 years.  But I came across some interesting information about real estate prices around the world that I thought you’d get a kick out of.  Is Canada the most overvalued real estate in the world?  Can you buy a whole compound in beautiful Panama for $300,000?  Why are so many retirees moving to places in Latin America and Asia to retire?  Let’s find out.

As I started doing my research, I quickly realized that even finding usable data on international housing would be a challenge – you have different currencies to convert, cost of living adjustments, and even different lending and banking standards to compare.  But in the end, this is the consensus:

In the last few years, there is no sign of a global uptick in housing prices.  However, of course we have many different countries and even micro-markets within nations to consider.  Ireland, Greece, Spain, and Portugal have seen large declines in their real estate prices, possibly because if their faltering economies (for the latter three) and their relative de-value against the Euro.

At the same time, Brazil and Germany have seen the biggest price increases in real estate. That makes sense, too – Germany’s economy is rock solid, and Brazil is booming and looking forward to an influx of tourists, soccer fans, and investors with the 2014 World Cup this summer.

I found plenty of graphs produced by fancy economists, like these that show that prices are up in France and slightly in Great Britain, but falling in Spain and plunging like a stone in Ireland.

Or, the (Inter)National Housing Affordability Index, which shows that Australia, Canada, New Zealand, the UK, and our own USA are the highest priced nations for housing, but Hong Kong takes the prize with off the chart housing expenses.

And how year over year, housing and real estate prices rose in about half the countries surveyed, but fell in the other half.

Ultimately, those stats are hard to put in context – and a little deceiving.  Remember that real estate prices in the main cities and popular urban areas are always way higher than in rural areas.  So, there is no clearer illustration of real estate prices abroad than if we look at actual properties.  Here are a few examples of what you could buy in foreign countries if you had $300,000 cash ready to spend (and a bag packed and passport ready.)

Panama City, Panama.
$315,000 will get you this 3 bedroom, 3 ½ bath garden-like compound in the jewel of Central America.  It’s only minutes from beautiful San Carlos beach and has granite countertops, a two-car garage, and located in a gated community with a pool, tennis courts, etc.  No wonder why Panama is one of the fastest-growing destinations for U.S. retirees!

Tuscany, Italy
For $281,708, you can purchase this 2 bedroom, 1 full bath, 1,722 square foot, 2-story home that’s actually part of a renovated monastery.  The outside is crafted with stone and the inside has a living room with an open fireplace, dining room, room for your wine cellar, a terrace, and a private courtyard. 

Ha Long Bay, Vietnam.
$320,000 goes a long way in Vietnam, but the picturesque and very-safe Communist country is still ultra-crowded, meaning that housing standards are always smaller.  Still, for that price tag you can get a luxury apartment in the BayView Towers, a 30-story high rise with infinity pool, skyrise, playground, and shopping mall!  The apartments have 3 bedrooms, 2 ½ baths, a full kitchen and a smaller half kitchen for the inlaws, and 1,800 square feet – GREAT size in Vietnam.  Oh, and by the way, the coast of Vietnam offers some of the most breathtaking and fun beaches and cultural activities.

Fabregues, France.
$265,000 - $310,000 will get you a “Bon jour” to the neighborhood at the Village Center Le Domaine Du Golf, which has 2 bed, 1 bath apartments and also smaller units.  Of course a swimming pool and golf course for residents is never too far off.

Buenos Aires, Argentina. 
Argentina’s capital city has been called the Paris of South America, yet with their own financial problems, prices have plummeted for over a decade.  $255,000 will get you a 2 bedroom, 2 bath, 800 square foot apartment in the bustling city center near the arts, museum, and the historic Teatro Colon.  Buenos Aires has become a huge home-buying destination for U.S. citizens recently.

Phuket, Thailand. 
$291,000 will bet you a fantastic apartment home right next to the beach on Thailand’s largest island, Phuket.  It’s world-renowned for it’s incredible beaches like Kp Phi Phi, Ko Samui, and Ko Phangan (they film a lot of movies there, like Leonardo DiCaprio’s The Beach.)  You’ll be able to jump into a post card beach any time you like but your 1,700 square foot home will also have a pool if you want to keep the sand out of your sheets.  Thailand is one of the hottest retirement destinations for Americans with its tropical climate, perfect beaches, low cost, and safety.

Ruijing, China.
Ruijing, China.
China’s economy is exploding, and with over a billion people, or about 1/6 of the world’s population, you could imagine how high real estate prices are.  But THIS is crazy! - $284,000 will buy you a tiny but functional 2-bedroom 268 square-foot apartment!  That’s over $1,000 per square foot!

Vancouver, Canada.
Vancouver, Canada.
Our friendly neighbors to the north have their own housing affordability issues, and cities like Vancouver are perpetually on the Most Expensive Real Estate List.  $300,000 will get you a mobile home, or a cruddy 700 square-foot apartment on the outskirts, but, believe it or not, that price tag won’t get you into even ONE single family, detached home in that area!  A new report reveals that Vancouverites spend an astounding 45-93% of each paycheck toward house payments! 

Tokyo, Japan.
Tokyo, Japan.
The economy of Japan has been one of the most volatile in the world since the 1980’s, but with a super-dense population and strong industry, housing in the biggest metropolitan city is always at a premium.  This year, average prices for a new condo construction rose to $6,931 per square meter (10.7 square feet to a square meter,) $3,039 per square meter for an existing condominium, and land at about $2,066 per square meter.  That means a modestly-sized brand new condo could cost you well over $1 million U.S. dollars! 

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