The economic climate at home has encouraged the international trend. "The tremendous lowering of interest rates that we have seen, with interest rates at historic lows--40-year lows--in 2003 and 2004, has enabled people to do the financing," says Delores Conway, director of the Casden Real Estate Economics Forecast at the USC Lusk Center for Real Estate. "Another thing is the huge run-up in the American housing market, enabling people to pull equity out of their own homes in order to afford a down payment on a second home." According to Ian Payne, senior vice president and managing director for Europe, Middle East, Africa and Asia Pacific for Realogy global relocation firm Cartus, buying real estate in emerging markets can be very rewarding. Take Thailand, which offers beautiful scenery and has seen tremendous growth. "People were going in there and making a complete mint," he says. What's more, buyers can often get much more for their money--be it for a home or basic living costs--in many international locales. "In comparison with U.S. prices, most European markets are quite affordable," explains Alexander V.G. Kraft, chief executive of Sotheby's International Realty France. "Where as $1 million doesn't buy you much in the U.S., in most European countries you can still find a grand home with lots of land. That's definitely a big incentive." Of course, with the positives come the negatives--or at least the potential for negatives, if buyers aren't prepared. Among the risks is that a currency will slide, taking with it the value of your investment, or even political unrest. Concerns over property rights, local laws and cultural clashes should be factored into the decision making process as well. "For some people, buying abroad is achieving a lifelong dream," explains Conway. "For these people it makes sense because in spite of the negatives, it is a lifestyle choice. They're quite willing to face those challenges--and probably even welcome them."
