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Property Frontiers: Oil Fuels Boom in Property Markets

November 9, 2007Article by Ray Withers

As the world’s energy supplies come under increasing scrutiny, oil reserves as far a field as Mongolia are generating a wealth of excitement, and leading to a surge in local property markets. As such, capital appreciation and rental yields in localised oil districts are rocketing, creating excellent opportunities for property investors. To take advantage of this potential, Property Frontiers announce the launch of two new property developments in oil towns in Canada and Mongolia.

Fort McMurray, a city in Canada’s north eastern province Alberta is creating waves in the oil industry. Commonly dubbed Ft. McMoney thanks to its profit making credentials, US government has named the city as the preferred solution to replace the United States’ dependency on Middle East oil. As the largest source of oil in the world, and with reserves bigger than Saudi Arabia’s combined, Ft. McMurray is considered to be at the heart of Canada’s oil production, and has the capacity to produce phenomenal amounts of the fuel. Indeed by 2015, the area is expected to produce over 3.0 million barrels of oil per day.

Today though, oil sand workers are battling a severe shortage of local accommodation and are currently being housed in camps on site. Demand for new residential accommodation is therefore enormous and with occupancy at 99.7%, rental yields of up to 24% are being achieved. Canadian property is therefore experiencing somewhat of a boom and Property Frontiers announce the launch of a development in a prime location to appease these high levels of demand. Riverside Executive Suites is based in downtown Fort McMurray just 30 minutes from the oil sands offering outstanding build quality and comfortable living for the workers of the oil sands. Capital appreciation is currently very high at around 20% pa meaning investors are faced with a wholly positive real estate outlook. Investing now will allow them to ride the wave of success that Ft. McMurray is enjoying and should guarantee very significant returns.

Property Frontiers have also launched a new project in Mongolia where similar opportunities exist. Ulaanbaatar is the operations centre of some of the world’s largest mining companies with large coal reserves, several un-tapped oil fields and the largest and highest deposit (2.85%) copper and gold mine in the world. Significant growth has been seen in the country’s entrepreneurial businesses and the Mongolian property market is in a strong position. For sale are apartments in the Temple, located in a key city centre location overlooking the central lake. With supply of local accommodation currently very limited, dramatic squeezes on demand have been experienced and rental yields of 13% net plus capital growth of around 30% is expected on apartments in the Temple. These phenomenal rates are likely to be further bolstered by increasing banking confidence which should sustain growth over the long term.

It seems then, that oil reserves may just be a pre-requisite for some of the most profitable real estate investment opportunities around at the moment.

For more information on properties available in the aforementioned destinations or for more information please contact Property Frontiers on +44 (0) 1865 202 700.

Author

Ray Withers

Ray has over 17 years’ experience in the international property market and bought his own first international property investment back in 2002. Aside from running Property Frontiers, Ray has been involved in residential, hotel, student and commercial property investment and development in both the UK and overseas and co-wrote "Where to Buy Property Abroad - An Investor's Guide". As Founder and Trustee of the Frontiers Foundation, Ray is directly involved with many of its projects to ensure they have a direct and tangible impact in individual communities across the globe. He is passionate about property, travelling, scouting out new opportunities and finding time to spend with his young family.
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