According to the Financial Times, if you’re the proud owner of a property in the Eurozone group of nations, not only might you have seen your home rise in value significantly since 2005, but the rise in the value of the euro compared to the pound recently will have seen you reap significant rewards from just owning your holiday home in the sun.
When the world’s property markets began to take a hammering and a nosedive just as the real estate price rise bubble burst in Britain, so it was thought by many that those who had perhaps over extended themselves by buying abroad would now regret their decision to purchase a home overseas. However, it may just be that those Britons with homes abroad are laughing all the way to the bank as the real value of their properties has risen.
Property in the eurozone could well be making British owners wealthy as the value of properties has risen significantly in some countries such as Italy and Spain, (yes Spain), tourism numbers are on the increase again in certain destinations and because the euro is still riding in its strong position against the pound…so, is it too late for the rest of us to cash in, and what about if you have a property abroad and you want to release its value?
The Financial Times report is built off the back of evidence from Close Treasury, the London based investments group; their research suggests that the average price of an Italian property has risen by 30% since 2005 to date, and that because of the upswing in the value of the euro, the real increase in Sterling terms for a Briton is 66%. Data from the group also suggests that over the same period and for the same reasons the value increase in the average Spanish home is 59% - proving all those sceptics who have slammed the market in Spain wrong…to a degree! This is also very good data and evidence to support the argument for taking a long-term commitment to any property investment – rather than a more short-term, speculative approach to investing which let’s face it would not have stood you in good stead in Spain in the past couple of years.
So, to answer the question we posed in the introduction to this article – namely, is it too late for us to cash in on price rises in Europe and property gains in general, the answer is ‘no’ of course not. You can potentially make money from property if you buy well in today’s market and you are prepared to commit to a long-term hold approach. Of course there are no guarantees when it comes to the investment of your money particularly in real estate – but the data from the Close Treasury group does show that over time property even in markets as seemingly volatile as the Spanish one can potentially make you money.
The other question we posed was what you can do if you want to cash in on your home overseas. Well, the good news is that there is some life beginning to appear in certain markets. For example, we reported on the fact that Ryanair is flying more frequently to the Spanish Canary Islands and that they are witnessing an increase in tourism numbers from nations such as Germany. This will have a knock on effect on the property market. So, if you’re fortunate enough to have a home in a location that is evergreen in terms of tourism activity then you could find that you can relatively easily sell up in 2010, and if the euro is still as strong against the pound, you will reap good rewards!
Alternatively, why not market your property more aggressively as a tourism let and earn an income from it. If the tourism market is uninspiring, what about long-term rental to a more permanent tenant – you just have to think about ways you can turn your investment into cash, and if selling it is not an option, or not an option you want to consider, rental is the next obvious choice. There are ways to make money from your property if it is well located – and if you’re thinking about buying a property abroad learn from this recession and the downward dip in prices and tourism activity. Remember that the most popular locations may be the most expensive, but they could be the best for a long-term approach to a property’s value and they could be best for the most consistent rental returns. Finally, the key is buying well in today’s market – not speculating about which way a market is going to go tomorrow or next year!
