· Pound vs. Euro up 4.31% over past year, giving buyers £4,900 extra per £100,000
· Strength of Pound vs. US dollar gives buyers £6,500 more per £100,000 compared to Feb '13
Winter sun destinations offer overseas property buyers more for their money compared to ski resorts, with a one bedroom property in Cape Town costing just £47,000 compared to £112,000 in Aspen, Colorado or £160,000 in the French Alps, according to HSBC's Overseas Winter Holiday Homes study.
Florida continues to offer affordable property for Britons, who can buy a one bed property in Orlando for £55,000 or a two bed property for £83,000. The pound is at a year high against the US dollar, up 7.1% from February 2013, giving buyers an extra $11,000 (just over £6,500) per £100,000 they plan to spend. The strength of the pound versus the South African Rand has risen by almost 33% in the past twelve months, giving buyers in Cape Town around £24,500 more to spend per £100,000 than February 2013.
James Yerkess, HSBC Head of FX, said:
"There are huge variations in what UK buyers can get for their money abroad, with exchange rates, local property markets and tax levels all making a difference. Buyers should consider how far they are prepared to travel, as well as whether the property is a holiday home or an investment before making a decision to buy. Taxes, the cost of maintenance and the cost of regular flights should also be factored in when making these decisions."
Table 1. Average winter holiday home prices in 2014
Winter sun versus ski
Popular winter sun destinations outperform ski destinations in terms of value for money, but the cost of long haul flights can push up the overall price. For those looking to buy in Barbados a one bed property costs £152,000, with winter return flights costing around £600 per person. A one bed property in Morzine in the French Alps costs slightly more at £160,000, although winter flights cost just £56 per person.
Buyers in Tenerife, the year round holiday destination, on average pay £149,000 for a two bed apartment in a complex with shared pool. They also benefit from flight prices at around £89 per person in the winter months and the increased strength of the pound against the Euro, up by 4.31% over the past year.
Dubai is the least affordable winter sun destination, with a one bed apartment costing £350,000. Vaud in Switzerland is the most expensive ski destination, where a two bed apartment costs £395,000 compared to £144,000 in Aspen.
Value for money in winter sun destinations can be offset by the cost of long haul flights. Winter flights to Florida cost around £503 per person, whilst flights to Cape Town cost around £786 per person. European ski destinations offer the cheapest flights, with flights to the French Alps costing just £56 per person.
Table 2. Current exchange rates and six monthly change in rates
*Compared to rates from Bloomberg as of 13th Feb 2013
Table 3. Cost of biannual flights for four people and car hire for each destination