Sterling has reached a seven year high compared to the Eurozone, injecting a spike of interest amongst British investors looking to buy properties oversea. Largely this is because of the current discord within the Euro countries over issues such as the Greek situation, integrating recently added nations and fear of the potential consequences from quantitative easing. The potential savings are really very significant with some regions having seen a competitive drop in value running at over 5% within twelve months. So where best to look for British investors looking for a property abroad?
Well first of all there’s no shortage of people looking into buying property overseas, with estate agents reporting a growth around 30%- 50% in related enquiries. Usually of course this would make it a sellers market but such is the strength of the pound this more than outweighs the advantage. Plus remember that enquiries do not always, or even often, result in actual purchases. Those looking to buy and with the funds at hand would also be advised to act soon, as it’s likely the pound will drop in value during the months either side of the upcoming General Election.
What’s Happening With Prices Across The Eurozone??
In some countries prices have risen substantially over the last 12 months, an astonishing average of 15% in the Republic of Ireland – although much of this is centred in urban areas where stock is limited especially for family homes. Other places to have seen modest rises are Portugal (4.9% compared to less than 1% the year previous), and Spain (only 0.8%).
Prices in other popular nations such as France and Italy have on average declined. France has seen a drop of 1.2% while in Italy it stands at a reduction of 3.8%. Even extremely desirable locations such as the Alps, Mediterranean cities and large estates have reduced in value by between 5%-8% due to the Rouble having lost such a large part of it’s value in recent months. This has considerably reduced the spending power of the Russian elite, so anyone looking to spend a lot will find themselves in the best position for years.
Mortgage Rates Are Generally Reasonable?
Besides Greece due to it’s economic plight mortgage rates are reasonable across the EU especially for those who have a reasonable deposit to put in place. Many British investors are taking advantage of the equity within their homes to re-mortgage and invest abroad for this very reason.
Ireland is the most demanding country after Greece where their own crash of a few years ago still remains fresh in the memory. Deposits of between 40%-50% are expected with rates of about 5% or so, more than double that of and the Balearics.
So What Does This Mean In Real Terms?
This is where the news gets really quite exciting. Much overseas property, not just in Europe but also in the USA is considered to be really very undervalued. Compared to the value of British homes you can buy a much larger property overseas. An average British family home valued at a quarter million can buy property twice the size in some locations, even in the USA where prices have rallied considerably (up over 6%) in the last year. Again it comes down to those with the capital to act swift while the pound is strong and overseas property is so undervalued.
So it’s a great time to invest if you have found a property and are confident of making the transaction within the next few months. We have bitten the bullet, rented some space with storage units London firm, to store some of our possessions and we are moving over to Spain at the end of May. Can’t wait!