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Fire and Ice for International Property Investors?
October 18, 2010Article by Ray Withers
If we believe this weekend’s Financial Times (16/17 Oct. 2010), one possible future for property investment lies in the Land of Fire and Ice. According to Robert Jackson of Atlantic Ridge Capital: ‘The point is that Iceland, despite the economic devastation, geo-physical turmoil and no small amount of fire and icing by the national tourist board, remains a remarkably safe, humane and civilised place to be an expat’.
Modern Iceland is a safe, uncluttered environment, with excellent public transport and (in the capital at least) easy access to cultural facilities. Despite extensive cutbacks, a ‘womb to tomb’ welfare state ‘still offers free universal healthcare and education and, in global terms, a stratospherically high standard of living to its 317,000 inhabitants’. Property prices, once wildly inflated, have halved since the banking collapse. A studio apartment in central Reykjavik will cost around 100,000 Euros, which is good by UK standards. And now that the country’s economy is stabilising again, the only way prices can go is up.
At a personal level, this is no surprise to me. I like austere, rocky landscapes a cool climate suits me well. Yet Iceland is far from the conventional ‘place in the sun’ destination associated with overseas property sales – the opposite of what most professionals think the public would like. This makes it an excellent illustration of how the industry should go. For it is time to put conventional assumptions to one side and be counter-intuitive. People are looking for new ideas, but they are also seeking security, whether it is for lifestyle or rental investments. These two, seemingly contradictory desires will afford great opportunities to discerning property professionals.
What is needed is a change of outlook rather than more of the same.
Written by: Aidan Rankin