The property column

Buying Property Abroad Liz Hodgkinson starts a new series No. 1 The different types of market

Buying abroad is now so popular that experts have identified three different types of foreign market: primary, secondary and tertiary.

Primary markets are sophisticated, long-established, have a well-developed infrastructure, a proper legal basis and are places where foreigners have bought successfully for many decades. Examples of primary markets are: France, Spain, Portugal, Italy and Florida. 

Secondary markets are less well established, legal structures may vary or be very fragile and are places where foreigners have only just started buying. In such places, there may not be many well-established estate agents and the buying procedure may not be sophisticated or streamlined. However, in these secondary markets the process of buying and selling properties by foreigners has already started to happen. Here, the risks of buying are necessarily higher than in the primary markets, but the returns can be correspondingly higher.

Examples of secondary markets are: Croatia, Turkey, Dubai. Many companies are already advertising properties in these countries, but as yet nobody knows for sure what the future holds for these countries, or whether property values will rise significantly.

Turkish properties, for instance, are now heavily advertised in the media, but at the time of writing (2005) it is by no means certain whether Turkey will enter the EU in 2007. It is on the cards, but currently the subject of much debate and speculation. If Turkey does enter the EU, most current speculators will be looking at huge gains, but as yet it is a big IF.  

Liz Hodgkinson is a prolific author and journalist contributing to many publications. She has written over 40 books on a wide variety of topics and has a background in national newspapers. She now falls into the 'later-life' age category and in recent years has started writing for this 'older' market, and contributes to Saga magazine, among others.

Liz has two sons and four grandchildren. She is divorced and now lives in London and on the South Coast. She has written three books on property matters and her interests include snooping round other people's houses and viewing showhomes.

Tertiary markets denote countries or areas where buying by foreigners has recently become possible, but is not at all established. Although properties in tertiary markets can appear to be very cheap, the infrastructure may be extremely fragile or unknown, and the buying process may be difficult for many reasons: the title may be disputed, nobody really knows who the property belongs to, mortgages may not be available and the paperwork may not be legally valid.
 

These brand-new markets represent the highest risk of all, and at this stage are only for the very brave – or foolhardy – to consider. Examples of tertiary markets, at the time of writing, include Poland, Slovakia, Russia, the Czech Republic. In tertiary markets, economies may also not be well established.