Astute property investors are starting to move into bargain-hunting mode, with real estate prices at five year lows in many countries across the globe, says a report released earlier this week by UK property group Knight Frank and Citi Private Bank.

The 2009 Wealth Report, the third annual collaboration between Knight Frank and Citi Private Bank, examines the attitudes of High Net Worth Individuals (HNWIs) towards their property and investment portfolios.

Liam Bailey, head of residential research at Knight Frank, says although enthusiasm for bricks and mortar investments have been dented by the effects of the credit crunch, many of the world's wealthy investors view the current downturn as an opportunity to acquire more properties cheaply.

Although traditional property hot spots such as Monaco, central-London and Manhattan in New York continue to count as prime real estate destinations, the report singles out a few up-and-coming locations that may offer better returns over the next few years.

These include areas as far a field as the Russian cities of Kaliningrad and Astrakhan, the winemaking region of Bordeaux in France, the Garfagnana Valley in Italy's northern Tuscany, the northeast coast of Brazil and Barbados in the Caribbean.

Bailey notes that the regional Russian centres of Kaliningrad and Astrakhan offers interesting residential investment opportunities due to their strategic locations as major seaports on the Baltic and Black seas.

Bordeaux is apparently undergoing something of a renaissance with increased Chinese interest in the area's vineyards, following Hong Kong's abolition of import tax on wine.

Northern Tuscany in Italy is becoming increasingly accessible to tourists on the back of improved infrastructure development. According to the report, the area to the north of Lucca, the Garfagnana Valley, is well worth considering as an alternative to the more traditional investment areas in the south.

Bailey says Brazil is probably one of the best emerging markets in the world for second-home buying. The country boasts more ecological diversity than any other, its economy has performed well in recent years and it is expecting a huge inflow of capital following the recent discovery of what is believed to be the world's largest offshore oil field.

Average property values are still low in Brazil, with resorts along the northeast coast priced at an average $1,400/sq m (R14k/sq m) for villas and $1,900/sq m (R19k/sq m) for apartments. That compares to an average €55k/sq m (R715k/sq m) in Monaco, the most expensive housing market in the world, according to the report.

The flight-to-quality trend is particularly applicable to Barbados, which has a stable government, good infrastructure and a developed economy. The island is very accessible with Virgin Atlantic recently expanding its routes to the islands from Manchester in the UK.

Bailey says there are also sound investment opportunities in lesser-known London suburbs, which offer good value on the back of falling UK property prices and a weaker Sterling. Fitzrovia, to the east of Marleybone, is a case in point.

Bailey concedes that Fitzrovia may lack the historic and architectural integrity of areas further west, but it makes up for this with a more varied selection of properties. Neighbouring Bloomsbury is already famous for its leafy appearance and elegant architecture, as well as the British Museum. - Joan Muller

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