Planning of buying a holiday home? Finding a home in the sun overseas will be an attractive proposition come April when buying second properties in the country means higher stamp duty rates, The Telegraph reports.
While there are no changes in taxes concerning to properties bought abroad, buying in Britain gets an additional 3pc on top, which only suggests that you need to look overseas if you are looking for a bargain.
In Europe, it would be the southern and eastern part - including holiday markets of Italy, Portugal and Spain - that offers the cheapest properties.
According to Organisation for Economic Development's benchmark, which measures property prices in relation to income, those are the most undervalued housing markets in the world.
What OECD does is plot local prices against typical wages and sets this against the long-term average, and they have been on this for already ten years.
In line with the long-term average would mean a reading of 100, which makes a local property at 110 10pc over-valued.
If based on the data, Britain would be 7pc overpriced, and Sweden which is facing a housing shortage is 114pc overvalued.
This long-term measure however is not as useful in predicting where property prices are heading, especially when talking about the short term.
Supply shortage could still bring prices higher even in the places considered "overpriced" like Britain and Sweden.
Worst-hit property markets may also not be recovering soon with over-supply still being an undeniable factor.
There are so-called uninhabited "ghost" estates which property buyers should look out for, which is one of the side-effects of the economic crisis.
Spain, for instance, regarded undervalued by 26pc by OECD, rose only 1.2pc in the previous year because of too much supply in the property market.
"In some Spanish cities there's a lack of infrastructure and no demand for property," saysTom Walker, of Schroders.
"Before you buy, ask yourself: can you travel around, is there local healthcare and education, like a university?" emphasizing the importance of this supporting infrastructure in preventing the dampening of future capital growth.
"If you buy property in a 'ghost city' that area won't have the ingredients for long-term value - only buy purely as a holiday home, and not an investment," Mr Walker added.
