Thinking about buying or selling overseas property this year? Now that you’re ready to get out there and start making your overseas relocation intentions a reality, it’s important that you… maybe get a second house/investment property… This is an excellent opportunity to take a step back and assess the current state of the global real estate market.
What kind of price reductions can we expect to see in Europe in 2023?
We anticipated that European real estate values would fall in the early stages of the pandemic. Economists in Ireland have predicted a drop in value of 12- 18% by the year 2021.
But then things took an unexpected turn…
Pinned-down demand is the result of construction delays and the subsequent cancellation of property showings that occurred last spring. As soon as they reopened, agencies all around Europe had a very successful summer season. Overall, the value of real estate in Ireland increased by 6% in 2022.
When pandemic unemployment payouts are phased off, Standard & Poor’s forecast a slump in European markets in 2021. But throughout the same time period, Europeans put away an average of 25% of their income. Young buyers are in a good position as long as interest rates are low. In areas where there is a shortage of new homes, existing home prices tend to rise or at least remain stable.
We are keeping a careful eye on the Spanish market, but the forecast is not optimistic. It is anticipated that property values in Madrid and Barcelona may fall by as much as 9% this year, with no sign of improvement expected until 2023. The drop could reach 13% at the national level. Whether you’ve always wanted a second home in one of Europe’s great cultural centers or a house on the Mediterranean coast, this year might be the perfect time to make your dream a reality. Keep in mind the Costa Blanca, and the Balearic Islands will not see price drops anytime soon.
There Is A Fresh Window Of Opportunity In South America
Construction slowed down in Latin America and Europe alike in 2015. Yet, the nations that interest us the most here—Panama, Belize, Mexico, Brazil, and Colombia—are all on the mend, and some are even offering better deals.
We recently reported that several of Panama’s largest property developers have begun providing rent-to-own options. You, the international buyer, can take advantage of this opportunity to assess if Panama is a good fit for your needs before committing to a more permanent presence there. If you decide to buy a home in a development that offers this option, your early rent payments may be applied to the down payment.
Obviously, the cost of living in Latin America is lower than in Europe. That’s true not just for the final price tag on your home but for your everyday expenses as well. The value of the dollar is particularly high in Brazil and Colombia. Investment and vacation homes in both nations are enticing choices. The devaluation of the Colombian peso from 2016 to 2020 has made the country’s exports to North America a steal. Even though the peso is on the rise again, it is still viable to enter this market for considerably under $100,000. The two most popular destinations for foreign tourists in Colombia are Bogotá and Cartagena. There is currently one attractive new building in Bogotá where one may purchase a brand-new, fully-furnished apartment for US$47,500.
Updates on Future Tendencies, Beyond 2023
While it’s true that some of the world’s most popular tourist destinations could see property values fall this year, we all know that in the long run, places like Paris, Lisbon, and Barcelona… Cancun, Buenos Aires, and Rio de Janeiro will once again attract throngs of visitors. The requirements of these vacationers for places to stay will shift. An increasing number of vacationers are projected to opt for short-term rentals as an alternative to traditional hotel corporations.
Some people, particularly in the near future, will choose to avoid the major urban centers altogether. According to Forbes, in 2020, 90% of those looking for vacation information were interested in rural getaways. They will be particularly drawn to places like the remote, pristine beaches of northeast Brazil, the rivers and forests of Belize’s interior, and the untamed Pacific coast of Panama.
And don’t forget about our newest housemate, the micro-home. Over the previous year, Airbnb saw a 112% increase in the number of users looking for a tiny house vacation rental. As the minimalist movement grows in popularity in the United States, we see an opening in a few of our preferred countries in Latin America. This trend has gotten so popular that we are preparing a special LIOS online event dedicated to the micro-home this year. When a date is set, I’ll let you know the specifics.
