What is it?: This is a bit complicated. The PPP stands for Purchasing Power Parity, which is basically the Gross Domestic Product of the country (the value of all final goods and services produced within a nation in a given year) divided by the country’s population. Usually this is given as an amount in dollars, with Bermuda at the top with $69,900 and Malawi at the bottom with $600.
To put these numbers into better perspective, we have listed the figures as a percentage of the UK’s PPP (or as a percentage of Spain’s PPP in the Resort Statistics). So if a country has a PPP of 50% that of the UK, it means that, in real terms, the average person in that country is able to purchase half as much as the average Briton.
What’s it good for?: It’s a simple way of seeing how far away the emerging markets are from reaching UK levels of wealth. You can see that markets such as Slovenia and the Czech Republic are well on their way. The North African markets of Morocco and Egypt have a long way to go.
Looking at these figures, it’s possible to see that property in these emerging markets is still relatively under-priced compared to the UK (or perhaps that the UK is over-priced).
What is it?: It’s the annual growth rate of a country’s Gross Domestic Product (see above for details).
What’s it good for?: We know from the PPP figures that the emerging markets are some distance behind the UK in terms of wealth. But, in most cases, they are catching up quite fast. The GDP Growth figures show which are moving the fastest.
A fast-growing economy can be expected to have a fast-growing property market as more and more citizens become wealthy enough to be able to afford to buy properties of their own.
What is it?: A very rough indicator as to the relative dangers of buying property in a particular market:
Green: No worries. As safe as investing in a Western European country.
Amber: Minor risks. Countries that are still in the early stages of getting their economy together, or have the potential for religious unrest or terrorism, small possibility of earthquakes, etc.
Red: Higher risks. Non-EU countries with precarious economies, the possibility of political instability, terrorism threats or religious conflict.
What’s it good for?: There is an element of risk to any investment. It usually follows that, the higher the risk, the higher the reward.
A decade ago, investing in property in markets such as Poland, the Czech Republic or Hungary would have been considered as a pretty risky investment and only a brave few investors took the risk. History shows that they did the right thing and they went on to see staggeringly high returns on their investments. But, imagine that they had bought property in Sarajevo in late 1991 instead? They could have lost the lot.
So you need to consider the risk element before placing your entire life-savings in a property in one of the higher risk markets. Yes, it looks as if buying property in Egypt could be very profitable. But there is also a slight chance that things could go seriously wrong over there and you could lose your shirt. Buyer beware.
Does this all make perfect sense to you? Be honest with yourself here for your own good. If there is anything about these statistics that are confusing, then stop and educate yourself about the basics of property buying in emerging markets before you go any further.
In our Book Store, you will find several excellent books that will explain the entire process simply and in a lot more depth than we are able to do here in just a few short pages. An investment now of around EUR25 and a few hours of your time could make the difference between making or losing tens of thousands of Euros over the next few years. So don’t take any chances – learn the basics now.
But if you scanned through all of the above impatiently thinking that everything here is simply common sense and second nature to you, please proceed.
Spend a while studying all of the information carefully and come up with a shortlist of countries where you may be interesting in investing.
You’re far from the end of the process yet. Now it’s time to investigate each of the interesting markets in depth. When you’re ready, go to the Country Menu and select your country or countries of interest.
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