The global economic crisis has had a profound effect on a number of property hotspots around the world. With recession tends to come a doom and gloom environment for a country's real estate market, but opportunities can also present themselves for savvy investors looking to exploit the fall in prices.
Two areas that were hit hard by the financial situation are Spain and Cyprus, with both having been favoured destinations for investment in past years. We take a look at the current situations in the countries and what the future may have in store for them.
Spain
Traditionally a popular destination for lifestyle and Buy to Let property investment, Spain benefits from a warm climate, excellent transport links and year-round tourism. However, recent economic troubles and a glut of unsold property on the market in the country have meant that it is not the safe haven that it used to be.
The market crash - which saw property values plummet - has meant that discerning buyers can find good real estate in excellent destinations being offered with massive discounts. However, while some areas are seeing price rises there is no guarantee that the market is on its way to recovery just yet. That said, the majority of observers remain confident that the market will recover.
Spain still remains a favourite holiday and retirement destination and could offer attractive returns for long-term investors.
Cyprus
In 2007 the Cypriot property market was booming, with a record number of properties being sold to overseas investors.
But since that time the market has been faced with a growing number of problems, which have been exacerbated by the financial situation. The fall in the value of sterling, the title deed predicament and reports of developers abusing property laws have all helped to contribute to a fall in sales of property to foreigners.
To demonstrate the problem that the market has been faced with, figures released by the Department of Lands and Surveys in the country show that last year only 1,761 properties were sold to non-Cypriots, compared to 11,281 during the 'golden age' in 2007.
In order to reverse this trend, reform must be implemented by the government in Cyprus to develop and introduce new legislation to deal with the problems present in the market.