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February 22, 2019
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The rise of property prices around the world and the most popular countries to buy in

The rise of property prices around the world and the most popular countries to buy in.

Written by MSCB’s mortgage affiliate, Simon Conn, an overseas property and financial specialist

A recent report suggested that Paris has surpassed London as a prime real estate market for investors. A strong rental market, relocating companies – particularly in the financial sector – post-Brexit and the prospect of the 2024 Olympics, are all key contributing factors to the increase in investment in Paris.

Prices in the French capital continue to rise with an increase in luxury property pricing and this will remain as demand consistently outweighs the supply of stock. For properties which cater for most buyers’ wish lists the price per square metre starts between €10,000 and €20,000 upwards.

The Côte d’Azur section of the Mediterranean coast includes famous resorts such as Nice, Antibes and Menton and the exclusive, sophisticated resorts of Saint-Tropez and Cannes. You will need a budget of over €1,000,000 for Saint-Tropez but heading inland offers more reasonable pricing and avoids the summer crowds. Tourettes-sur-Loup offers good value for money with prices starting at €175,000.

There is an excellent rental market in this region with an extended rental period due to the favourable climate and year-round events calendar. Well-maintained properties within easy access to the coast and amenities will always have great rental potential. Nice is notable as the gateway to the Côte d’Azur with its excellent tramway and links to coastal resorts and pricing varies when compared to other towns. For a central apartment, prices start between €250,000 – €300,000 and slightly less for studios and apartments in need of work. Nice itself has an excellent rental market with its location, boosted by the popularity of holiday rental sites like Airbnb.

The USA continues to be a much-loved destination for international real estate buyers. Areas such as Miami and Fort Lauderdale in Florida and Newport in Rhode Island are appealing to the motor and sail yachting communities. Real estate prices in these key areas have continued to climb back to and even exceed levels last seen before the recession of 2007/08. More affordable housing in these landmark areas are found in outlying locations.

But the USA and Canada have so many opportunities for those seeking waterside locations outside the iconic ones. The state of Maine and to the north, in Canada, the yacht-friendly coast of Nova Scotia have a strong draw for boat lovers who also wish to reside in these beautiful areas.

For those wishing for more year-round waterside living, that is less affected by seasonal extremes in weather, the coasts of North and South Carolina offer many great opportunities for ocean and more sheltered intracoastal yachting. Here, real estate prices are often lower than in states to the north and south.

Italy has seen a mixed market lately. The year started very slowly but, despite Brexit discussions, clients are still interested and booking viewing trips. The ‘old favourites’ seem to remain constant when there is a little instability. The ever-popular Tuscany is doing well. Bargains can be found North of Lucca or North Eastern Tuscany around Poppi. Prices start as low as €50,000 for a property to restore and about €65,000 for a habitable one.

For those looking for warmer climes, Puglia in the south of Italy is popular. A detached house with land, which is habitable but in need of modernisation, can be purchased for around €130,000 to €150,000.

Lake Como remains at the top of many people’s list with its stunning period villas along the shoreline. If that is out of your price range, a two bedroom apartment, fully furnished with garage, shared pool and stunning lake view, just an hour from Milan, sells for around €245,000. Prices drop further north, starting at around €70,000.

Italy has many other areas to offer.  Try Western Liguria or the beautiful beaches of Southern Le Marche.

In Spain, house builders such as Taylor Wimpey continue to fully support its ever-flourishing Spanish operation. Their build record for last year reflects sales from buyers spread right across Europe and further afield – they are no longer dependent upon the UK.

It continues to set quality and environmental friendly standards in the mid-priced property range only found previously in the upper price bracket. Last year, it launched 342 new homes onto the Spanish market at an average sale price of €344,000.

Mortgages may be available in each of the above countries, subject to an applicant’s overall personal financial profile and property valuation. At the time of writing, maximum loan values in each country are; France 80%, USA 70%, Spain 70% and Italy 60%. Other countries which are currently popular include Portugal with a maximum 70%/80% and Turkey at 60%/70%.

The most important advice I give clients buying abroad is to always undertake thorough research before committing to anything. Here are just some of the things to look out for:

  • Ask questions about where a property has been built. For example, if it has been built on an area that should have been set aside for green belt or agricultural land, then there is a risk.
  • In some cases there can be problems with properties that have been constructed with the wrong permits, granted as a result of corruption, or with no permits at all.
  • Research the background of the property’s location. You may be surprised to learn about the chances of earthquakes or volcanic activity, or it may be in a poor neighbourhood, have loud nightlife, or commercial units nearby with associated activity.
  • Consider planning permission and which licences the property needs. Not having the correct licences could have an impact on what utilities you can obtain.
  • One of the most important warnings when purchasing abroad is when it comes to contracts. It is common to only receive one contract in the local language, in which case, you must have a professional translation completed.
  • If you are buying a property to rent out, consider the cost of maintaining it. Decide if it is worth employing a managing agent to look after it for you, but do not forget to factor in their costs, as it will reduce your profit.
  • Distance – if you are travelling around the world, who will sort out any major problems if they arise?

Always get your finance approved in principle before signing a contract and if you are applying for a mortgage, ensure any contract signed is “subject to finance”. This will help you recover an initial deposit if you are turned down during the mortgage process due to financial analysis, valuation and legal issues.

 

For any enquiries or questions click here: 

https://www.simonconn.com/offers/finance-enquiry-form-mscb/