Demand slowdown arrives
The seasonal slowdown in overseas property searches is continuing with searches down by 2.3 % in October, the latest figures show.
Despite the slowdown though, interest in two countries, Germany and Ireland has increased with searches increasing 7.45% and 8.11% respectively, according to the latest report from Rightmove Overseas.
Lifestyle buyers are beginning to put their feet up for Christmas while bolder investors are increasing their activity, the report suggests.
‘As expected, the seasonal slow down continued this month with the most popular traditional European destinations taking the brunt of the decline in search activity. A number of second division destinations stand out for bucking the trend, actually increasing in activity,’ said Robin Wilson, head of overseas at Rightmove.
‘We expected lifestyle buyers to begin winding down their activity as their thoughts turn to the holiday season, but the increased activity in less obvious destinations could indicate there are investors out there prepared to start dipping their toes in the water again,’ he explained.
‘We’ve been tipping Germany for a while now and once again it shows good form climbing the rankings and putting on 8% in search activity. Ireland also put on a useful 7% overall with Cork on its own jumping over 32%,’ he added.
The only countries in the Top 20 putting on increases this month were the US, Australia, Germany, Egypt, Ireland, Canada, Switzerland, Austria and India.
According to Wilson this is because hey are pretty safe secondary markets with good established infrastructure, certainly not classic investment or exotic new market destinations.
‘It might be too early to call, but we may be seeing the emergence of a new breed of disciplined investors, more interested in long term gains than quick bucks. That kind of buyer will demand a level of quality and service from opportunities that will require developers and agents to really step up their game and that can only be good for the industry,’ he said.
David Kerns, private client dealing manager at Moneycorp, has also seen a decline in searches for overseas property related transfers, dropping 13.6% between September and October.
‘In addition to a seasonal fall, this could also be due to the fluctuations in October for Sterling against most major currencies. Against the Euro the rate fell from €1.14 at the start of the month to a low of €1.11 before recovering to original levels by the end. The fall in the rate would have made property across most of Europe less attractive for UK buyers,’ he explained.
‘However there were green shoots in the Rightmove statistics, as they do show an increase in the searches of property in the United States. This could be due to Sterling strengthening against the US Dollar throughout October, rising from $1.57 to $1.60. Fluctuating exchange rates impact on the demand for overseas property and so the importance of discussing these movements with a specialist is of increasing concern for individuals buying property abroad,’ he added.