Holiday Home Hotspots of 2007

Here’s a poke in the eye for all those proclaiming that buying a holiday home overseas is dead. While increasing numbers of people are buying property overseas purely as quick-flip investment vehicles, in search of hard capital gains, a steady number of purchasers are keeping the holiday home investment industry afloat – and the numbers are edging up.

Spain and France continued to top the list as Britain’s favourite holiday home investment destinations of 2007, but it is Greece, Malta, Croatia and Canada that are tipped to be the big investment hotspots of 2008. The Holiday Home Hotspots Review of 2007, published by HolidayLettings.co.uk, confirms that Spain’s allure is intact, despite the appalling press and doom-mongering that surrounded its property prospects last year. Additionally, the portal identified a shift away from the pure investment buyer towards what it describes as a ‘mixed use’ investor, that is, people looking to use their property and rent it out when they are not there.

Other big performers of 2007 were Portugal (up 138% on 2006), the UK itself (up 100%) and Italy, which surged ahead by 75% on previous years, thanks largely to the new TAV high-speed train service. In line with much of the broader press this month, the survey confirms that investment in Bulgaria slowed down during 2007, with the Balkan state falling two spots on the portal’s Top 20 list of holiday home investment hotspots. The simple equation of too many empty properties and not enough tourists is being blamed for the former star’s downturn. It is widely thought that development began too early for the tourism market to develop and that there simply isn’t the tourism demand to support such volumes of accommodation. Properties in Bulgaria have also been accused of not having nearly enough USPs to help them stand out amongst the many competing apartments and established local hotels.

New kids on the holiday home rental block included Argentina, Brazil, Slovakia, Slovenia, Russia, Jamaica, Cuba, Uruguay, Romania and Latvia, which all appeared for the first time. However, these virgin markets are ones to keep an eye on for now rather than ones to run to with bags of cash: we may be jetting off further and further afield in our desire to travel to far flung destinations but these new markets are far from being established. Buy here for potential capital gain, not guaranteed rental income.

Top 20 holiday home investment hotspots

2006 2007
1 Spain
2 France
3 England
4 Italy
5 Portugal
6 Cyprus
7 Canary Islands
8 Turkey
9 Balearic Islands
10 Florida
11 Bulgaria
12 Wales
13 Greece
14 Scotland
15 South Africa
16 Australia
17 Croatia
18 Switzerland
19 Ireland
20 Canada (up from 30th)