Why are British expats still buying up properties in France and Spain?
The eurozone economic woes are not deterring people from buying property in France and Spain with British investors naming them as their top two destinations. The new Property Hotspots Report from currency specialists HiFX puts the United States in third place followed by Australia, New Zealand, Germany and Italy.
France tops the list, with 35% of buyers looking to own a property across the Channel. Mark Bodega, director at HiFX believes that this is because France is regarded as a safe place to buy, adding, ‘It goes without saying that the sun and lifestyle are a big pull but buyers are now also able to get better value for their money and take advantage of the weakening euro,’ he explained.
Spain is also still popular despite the newly imposed austerity measures. ‘Spain continues to attract Brits who are hoping to take advantage of depressed property prices. The average property price in the country is down almost 30% since the market peaked in 2007,’ said Bodega. However, he added that buyers in Spain need to be aware that the country’s macro economic outlook remains poor. ‘We are unlikely to see any further stabilisation in the current housing market. Buyers should remember that Spain is in a precarious position, not so much due to the weight of her sovereign debt compared to GDP, but due to the high levels of private debt and an extremely weak housing market,’ he pointed out.
Quote from PropertyCommunity.com : “Nationally property prices in France have fallen, sales are also down but there is considerable regional variation, according to figures from notaires and estate agents. The latest data from Notaires de France show that over the first quarter of the year prices fell 1.6% for properties, with new homes falling 1.4%.”
The survey also shows that 25% of Brits believe it is cheaper to own and run a property abroad than in the UK. However whilst prices are cheap in Spain, potential property owners should be warned that further depreciation in property is still likely and will affect any future returns. ‘The recent gains made by the Pound against the Euro can be felt throughout Europe but Spain and Portugal have also seen costs and prices fall for a variety of goods and commodities unlike other parts of the Eurozone, notably Italy,’ said Bodega, ‘We advise buyers looking to pick up a bargain in these countries to do their research and take on board the risk of buying in economically uncertain times before making any important decisions,’ he added.
The survey also shows that capital growth is not at the forefront of people’s minds when buying abroad and that the core appeal of continental Europe hasn’t changed as buyers are attracted to the popular formula of sun, sea, sand and sangria. Some 74% of Brits rated lifestyle as the most appealing factor, closely followed by the weather at 66% with only 6% suggesting that they were looking to obtain solid rental returns.
Bargain property prices in the US are also proving to be attractive. ‘Signs of US recovery are beginning to become more apparent. There are bargains to be had but Brits looking to buy a US property as an investment need to focus on areas where the rental demand is strong and where taxation on property is low,’ added Bodega.