Positive economic conditions in the UK, including a stronger pound, could fuel a rise in overseas property purchases in 2014. However, buyers should realise that real bargains in the Eurozone are getting harder to find as European markets hint at stabilisation, said The Overseas Guides Company in January.
The UK's strengthening economy and bullish housing market should this year give more British people the confidence to invest in holiday homes in Europe, where property markets are behind the UK in terms of recovery.
“Scandinavians were prominent buyers in the Mediterranean in 2013, thanks largely to the economic buoyancy and strong currencies of their countries giving them serious buying power,” said Richard Way, Editor at The Overseas Guides Company. “It's the turn of the British buyer to return to the overseas market in force – especially as the pound is expected to maintain and possibly gain value in coming months against the euro.”
While average property prices in expat hot spots such as Spain, Portugal and France remain below the peak of 2007, there are signs that prices are levelling out and even rising in some of the more desirable resorts. The Overseas Guides Company looks at key markets in more detail:
Average property prices are expected to bottom out in Spain this year, but don't expect growth to necessarily follow, as Spain's depressed economy and oversupply of housing stock will hinder any upward pressure.
That said, in the most sought-after areas of the Costa del Sol, Costa Blanca, Murcia, Costa Brava and Mallorca, prices have already stopped falling and in some cases are rising year-on-year. Buyers should have realistic expectations and recognise that market conditions have been built into many prices, so there is little point expecting to have an offer that is, for example, 30 percent below the asking price accepted on a prime property.
Researching the local market remains as important as ever in 2014. In the resale market there are now examples of repossessions being more expensive than comparable properties being sold by private vendors. This is down to banks being able to offer attractive mortgages with their properties, countering the negative perception of higher prices – but of course, for cash buyers this is irrelevant.
The Portuguese property market has seen stabilisation since the second half of 2013. This is thanks in part to a lack of new-build property, particularly in key Algarve resorts such as Albufeira and Vilamoura coming to market, the effect being a rise in demand. In addition to this, Portuguese banks are beginning to offer more financing options with repossessed property to non-resident buyers, whereas in recent years this has been limited. In the higher end of the market, interest from non-EU buyers should continue to increase as awareness of the Golden Visa grows.
France's implementation of a punishing new tax on wealthy residents might have grabbed the headlines, but in actual fact, the new rules shouldn't affect or deter the average expat retiree or second homeowner there. Value for money resale properties are still in abundance in France, with the South-West and Languedoc being favourite areas – and expected to continue to be in 2014.
With the Turkish lira hovering around record lows against the pound, the cost of living in Turkey has become especially good value for British expats and homeowners, making it an attractive destination. Meanwhile, the country has been tipped as a future global economic powerhouse – along with Mexico, Indonesia and Nigeria, together making the 'MINT' nations. Turkey arguably offers more exciting investment potential than other more established Mediterranean destinations.