LONDON | Ambitious property buyers hoping to pick up a European bargain despite economic turbulence pose a challenge to forecasts of a never-bottoming peripheral real estate market. The ongoing sovereign debt crisis is doing little to deter home buyers as Spain and France remain the firm favorites for those seeking to buy a place in the sun, currency specialists HiFX said on Tuesday. Its Property Hotspots Report crowned France and Spain as the top destinations for property abroad as voted by UK adults.
France tops the list, with over a third (35%) of buyers looking to own a property across the Channel. Spain is also continuing to lure home buyers in spite of recent turmoil and the newly imposed austerity measures announced in their recent Budget. Mark Bodega, director at HiFX, commented that there are opportunities ahead:
“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 30pc since the market peaked in 2007. Yet, while there are discounts to be had, buyers need to pick carefully. The macroeconomic outlook remains poor, and because of this, we are unlikely to see any further stabilisation in the current housing market,” he added.
HiFX noted in its report 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. The company’s analysts also criticised the deficit target imposed by the European Commission.
“President Rajoy’s recent ‘very, very austere budget’ will only result in further strikes and unrest which could well lead Spain deeper into a self-fulfilling downward spiral.”
The study further revealed that a quarter of Brits (25%) believe it is cheaper to own or run a property abroad than in the UK. Bodega remarked that
“The recent gains made by the pound against the euro can be felt throughout Europe. 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.”
Top destinations for UK adults looking to buy a property abroad
The Property Hotspots Report showed 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. The research found that three-quarters (74%) of British people rated lifestyle as the most appealing factor, closely followed by the weather (66%), only 6% of British were looking to obtain solid rental returns.
The report also stated that whilst some buyers are keen to stick with what they know, recent events in the euro zone have in fact boosted the appeal of property hotspots further a field. British buyers are now setting their sights on other English-speaking countries including USA, Australia and New Zealand.