American Idol Cancelled, U.S. Investors Buy Property Overseas

Despite dealing with semi-regular bouts of inflation locally, the dollar has lately been holding strong against most other international currencies–especially Europe.  What does that mean for you?  Well, when the last time you dusted off that old “someday I want a second home on the French Riviera” dream?

Upper-tier buyers are always going to gravitate toward markets that will give them the best bang for their buck, and investing a strong dollar into a soft economy creates a perfect storm market for potential buyers.  According to Knight Frank real estate consultancy, European market prices fell 40-50% during the 2008 financial crisis, and their recovery has consistently lagged behind that of the United States.  With exchange rates as favorable as they are, U.S. buyers can save as much $100,000-$200,000 on international properties.  For example: A €500,000 home last July cost around $683,000, according to Knight Frank. Now, that property is selling for roughly $558,000.

The markets showing the most promise, according to industry observers, are France, Spain, Italy, Germany, and Canada. Each of these countries have shown some trend toward an environment ripe for U.S. investors.   According to USForex, the number of homebuyers increased nine-fold from 2013 to 2014.  German real estate company Kumpf claims that their total number of U.S. clients has doubled since last year.  The Italian market is currently seeing an uptick in rentals–traditionally a reliable indicator for rising sales.

Noticeably absent from the list, however: Great Britain.

Now that the Tories emerging from the 2015 elections with a small but considerable majority over their liberal counterparts, Great Britain is looking at their first stable government in almost a decade–and experts say that such stability will bring optimism to the housing market.  “The main market impact,” says Knight Frank, “is likely to be seen through renewed economic and consumer confidence following the return of what looks likely to be a relatively sustainable government.” With the Liberal Democrat’s threat of a “mansion tax” on all homes over £2,000 seemingly shelved permanently, top-tier buyers are now looking back to increasing premium market activity and driving up prices with the rising demand for the first time in recent memory.  Although lower-end markets with credit restrictions will temper expectations slightly, firms such as Savills are still predicting modest increases in buyer inquiries in most income brackets for the foreseeable future.

While this is excellent news for the English economy, such rising prices will most likely drive upscale foreign market investors toward fresher waters where outlook aren’t so rosy–at least in the short term.   So if you’ve been waiting for the right time to take the plunge and live your wildest James Bond villain fantasies, it might be a good idea to start investing in those romance language Rosetta Stones instead of memorizing Colin Firth’s speech patterns.

 

Sources: CNN Money, Forbes Place and Spaces