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The Worst Places to Invest in 2013
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Venice, Italy
No property investor wants to miss
out on the next big opportunity,
but there are still some countries
that, despite all the marketing hype,
will leave you feeling the chill of
recession long after you have parted
with your cash.
Although there are arguably many
worse places in the world to put
your hard-earned money, overseas
property investment company
Colordarcy took a look at what it
considered to be the worst property
markets of 2013 – markets that
enjoyed stable governments and
democracies, as well as functioning
economies.
All of its selections of the worst
property markets for 2013 were in
Europe, with just one making it onto
the list for the second year running.
5. ITALY
Italy’s economic situation is so bad
the government is even laying off
job centre staff to save money. This
goes some way to explaining why
Italy enters our Worst Property
Markets list. Property prices in Italy
have slumped by 5.1 percent. Just
when other parts of Europe are
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worrying about property bubbles
– Italy has lost all the fizz out of its
property market.
That said, there is no shortage of
opportunities to invest in Italy if you
enjoy la dolce vita (the good life) with
some nice properties to be found
amongst the lemon trees in those
green Tuscan landscapes.
Any students of Italian history will
know about Italy’s economic miracle
of the 50s and 60s. It needs another
one now. Italy has suffered the
longest recession since the end of
the Second World War and, with
consumer spending low and exports
not competitive, the economy is
forecast to shrink by 1.8 percent this
year.
The next generation now has to
deal with youth unemployment
at a record high of more than 40
percent. Many would rather leave
the country than buy a home in Italy.
Italy hasn’t been in this kind of mess
since the end of the Second World
War, and it is unlikely that a second
economic miracle will be coming
anytime soon.
If you bought a property in Italy in
2013 it is likely you will have lost
money, and the chances are that
you will lose even more in 2014
while trying to plug the leak in rental
returns.
ECONOMY: It’s still shrinking and the
outlook remains bleak.
CAPITAL GROWTH: All the cards are
stacked against it.
RENTAL MARKET: At 2.56 percent in
the capital, Rome, the rent wouldn’t
even cover your costs.
FINANCE/MORTGAGE ACCESSIBILITY:
The mortgage market is tight in a
country where job security is a thing
of the past.
VALUE: Property in Italy is expensive
and there are better places to invest
your money unless, that is, you have
a particular liking for this country.
4. CROATIA
The head of Croatia’s Chamber of
Commerce was recently arrested
on suspicion of corruption and
embezzlement. This is news the
country can do without, after years
of recession and plummeting
property values which saw another
5.5 percent fall in 2013.
Croatia is a beautiful country and a
nice place to visit for cheap holidays,
but a property investors’ paradise
it most certainly is not. This is a
country where it is still acceptable
to send ‘thugs’ around to evict a
stubborn tenant, according to The
Global Property Guide.
What can be said about Croatia
is that it is an example of how
joining the European Union doesn’t
necessarily guarantee an upsurge
in property prices and an economic
feel-good factor. Unlike some East
European countries fortunate
enough to join the EU party early,
Croatia was the latecomer – arriving
just as most of the rest of Europe
was nursing a hangover.
After four long years of recession
there are rumours that Croatia
may seek assistance from the
International Monetary Fund (IMF).
The country’s borrowing needs were
described as “enormous and very
risky” by their own Finance Minister.
This doesn’t inspire confidence;