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This time last year, Chandra Gosavi's property portfolio looked like an A to Z of shrewd investment. The doctor from Leicester has two homes in Bulgaria bought for a total of €118,000, two in Egypt costing €100,000 and one in northern Cyprus bought in sterling for £70,000. He has also bought in Mumbai and owns land in Alicante, Spain, where he plans to build his own property.
His choices seemed canny at the time. Bulgaria had just joined the EU, there was a possible reunification of Cyprus, and Egypt was maturing as a major tourist destination. Those factors would all boost values, surely?
But neither he, nor most other Britons buying abroad, expected a global downturn to spark house price falls in almost every country in the world. Today his properties have dropped in value by tens of thousands of pounds and his investment perspective has had to move to the long term.
"My risk strategy has always been on the high side, but my theory is to avoid putting very large sums in any one country. That way, if one market hits trouble, I don't lose too much. I remain convinced this is a better approach than, say, spending £500,000 on one place in France," says Chandra.
He and his wife Rashmi, also a doctor, say some of their homes will be for their personal use and they do not intend to sell any for up to 15 years from now, by which time they believe the markets will have more than recouped any current losses.
"I realise prices have fallen but I'm not into buying and flipping. With the current market, I am obliged to think long term, not short term," he says.
Prices in Black Sea resorts and ski towns such as Bansko and Pamporovo have seen 20% falls since the autumn.
As Nick Barnes, head of overseas research at estate agent Knight Frank, says: "The market in these places is based wholly on foreign investors. Bulgarians aren't buying, so when there's a global credit crunch the market disappears and prices fall."
It is no better in other markets popular with British investors. Construction of holiday homes in Cyprus is "at a standstill", says Barnes, because of too many unsold apartments and villas.
Meanwhile, prices are falling in India, too, where the country's largest listed house builder, DLF, this month reported a 69% slump in profit and 59% drop in revenue. Business journal Asia Money says the Indian housing market is "primed for a bloodbath".
The Gosavis' short-term situation reflects the reality that those Britons who borrowed heavily to invest in foreign bricks and mortar at the top of the market are now faced with substantial negative equity.
A lack of official data means it is impossible to say how many are at risk, but research firm Mintel says at least 800,000 Britons owned homes overseas in 2006. Most UK estate agents with overseas teams admit privately that sales since then have dropped 60% to 75%, so the figure is unlikely to have increased significantly.
Yet those Britons who are brave enough to buy now - and have sufficient cash to do so - can find remarkable bargains. Panicky developers and agents are offering unusual deals to compensate for the credit crunch and weakness of the pound.
Oceânico Group is offering a "no payment for 12 months" deal on flats at a golf resort on the Algarve, in return for a £10,000 deposit and a pledge to buy in 2010.
In Mallorca, British developer Greenside has frozen the pound-euro exchange rate at a late 2007 level for those buying some of its villas, to counteract what it calls "bad luck for British buyers beyond their control".
There are heavily slashed prices, too. In the Turkish tourist resort of Bodrum, selected villas marketed by British estate agent Nirvana International are down from £200,000 to £120,000. It is also giving away a car to the buyers of flats in a nearby development.
Top-end agent Aylesford International is selling Casa Cigala, a villa on Ibiza, for €1.8m after failing to find a buyer since 2007 at its original €2.6m.
In Italy a Tuscan villa overlooking Lake Montedoglio has been on sale for over a year at €3.2m; now Savills has slashed it to €2.2m. "Vendors are offering substantial discounts, sometimes in line with the devaluation of the pound versus the euro," says Roger Coombes of British estate agent Cluttons.
But the biggest falls are in mainland Spain, where many sellers have reduced prices by more than 30%. However, according to Knight Frank's Nick Barnes, "there's not the slightest sign we're even remotely near the bottom of the market," suggesting that ballsy buyers can negotiate even lower prices if they have the guts to bargain. Developer Taylor Woodrow is offering 36%-plus discounts on flats at El Bosque de la on the Costa del Sol - they were €271,000 and are now €173,000. On the Costa de la Luz, "discounts of 30-40%, previously unheard of, are achievable," admits Andrew Benitz of Titan Properties.
But Britons who want to buy in Spain or other falling markets are finding mortgages difficult to obtain.
"We used to get 80% loan-to-value (LTV) for holiday homes in Spain but now it's 60% at best," explains Clare Nessling of Conti Financial Services, specialists in foreign mortgages. "A mortgage for a buy-to-let is impossible. Funding anything on a big Spanish development is hard, as flats will be downvalued."
Mortgage availability for Dubai has plummeted too, she says, confirming signals from selling agents that prices have fallen 10% to 40% since the new year. "We used to get 70% LTV on any property, but now it's 50% maximum on villas and houses. You can't get a mortgage on a flat there," says Nessling. They are also hard to get in the US, with 50% maximum LTV.
But lenders' policies towards Britons buying in long-standing favourites such as France, Italy and Portugal remain broadly unchanged - and, of course, at highly competitive rates.
So are these countries still safe to buy in? Agents certainly think so. "Buyers remain loyal to places where they feel financially safe - France, Switzerland and Italy have all done well, with good demand and most prices falling only a little," says Charles Weston-Baker, head of international sales at Savills. "There are bargain hunters, of course, but most are waiting at least a little longer until they're sure the markets are near the bottom."
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