Cash in on a home away from home: promising property hotspots for 2008

My hot tip for 2008 is Panama, one of the best places in the world to retire with or without a canoe.

Prices are rising on the Coconut Coast of Bahia, north of Salvador, but they are still a fraction of those in the Caribbean. You can buy a new two-bedroom flat from £26,000 in Joao Pessoa, which has a palm-fringed white sand beach; a two-bedroom terraced villa from £35,000 (Property Bond International).

A tropical fruit plantation in 10 hectares with mountain views is available at £51,300. Or, a seven-bedroom mansion, with its own pool and boat dock, for £270,000, a short drive from Salvador Airport, with its direct and charter flights to Britain (11 hours). A new international airport is being built further north in Natal, the closest Brazilian state to Europe (nine hours flying time from the UK).

More upmarket developments growing up along the north-east coast include The Reef Club, a low-density, eco-friendly scheme being built on the edge of a pristine three-mile beach. Prices start at £129,000 for a two-bedroom apartment with a guaranteed two-year 5% rental income.

Brazil has a year-round rental season with returns up to 10%, which would be taxed at 15%. Buying costs are 4% to 7% of the declared property valued. Owners pay an annual property tax of 0.6% of property value. Non-residents pay 15% capital gains tax on any gains made on resale.

India

New jobs and rising incomes for the aspiring middle classes have fuelled a property boom in India. In Mumbai, where many international IT and biotech companies are relocating, new high-rise flats are fetching Mayfair prices. Demand for residential property also outstrips supply in the capital Delhi, in Bangalore and Hyderabad.

India has one of the fastest growing economies in the world with over 8% per annum growth in gross domestic product projected over the next few years. With a shortage of property in major cities, the potential for growth remains vast.

The entry price for a two-bedroom apartment in one of India’s emerging cities is around £30,000. A new studio flat in a gated community in Maharashtra State can be had for £17,500, with a guaranteed rental income of 7% for five years, through Profile Europe.