In the immediate aftermath of the EU referendum, we faced a period of uncertainty, however, international property buyers showed less hesitation than expected. The majority of those searching continued their hunt and equally those close to transacting saw their purchases through. Buyers are increasingly adopting the view that life must continue. Currency fluctuations will continue and people will be mindful of those, but we don’t believe that this alone will alter their ultimate decision to buy, as pricing also fluctuates accordingly.
Within the key European markets, prices have likewise adjusted in recent years. At the back of buyers’ minds, there will always be the question of whether there will be a further adjustment because of Brexit. If there is, the expectation is that it may only be marginal as the markets continue to take into account Brexit’s ultimate effect.
In times of crisis, people feel more secure with a tangible asset such as bricks and mortar; investment volumes in key global cities such as London and New York in 2008 and 2009 bear testament to this.
Price cycles and a market’s liquidity are key considerations. Buyers want to know that prices are realistic in the context of the market conditions at the time and that future investment in amenities and transport will safeguard their investment, expediting their exit strategy if and when they choose to sell. Beyond that, deciding to buy a home abroad is very much driven by a combination of investment and lifestyle; it’s about relaxing, enjoying a better climate, a different culture, having the benefit of another language and spending time with one’s family. The lifestyle decision becomes increasingly important in the frenetic world in which we now live.
Through Knight Frank’s global network of offices and our multilingual website we are seeing not only domestic buyers in countries such as France, Italy and Spain expanding their share of their respective second home markets, but they are being joined by Scandinavian, Middle Eastern and Asian buyers. Accordingly, vendors are seeing increased diversity of buyer nationalities, helping to create greater stability at a time of uncertainty. In tandem, cities such as Barcelona, Madrid and Berlin are enjoying increased international demand, with Paris experiencing greater momentum once again.
The US remains attractive to numerous nationalities, partly given the strength of the US economy and the dollar but also due to the lifestyle on offer. Opportunities have arisen in Miami as prices have softened on the back of reduced capital inflows from the more uncertain markets of Latin America. Turnkey property remains the firm favourite of many buyers today particularly as clients are increasingly letting their overseas homes as they recognise the benefits of income generation. For some clients considering multiple homeownership, the availability of a fully serviced property either attached to a global hotel brand or otherwise offers welcome security. Despite the continued uncertainly I remain positive about the year ahead, as the draw of overseas and lifestyle-driven investment continues and globally buyers seek the security of a tried and tested asset class.