Cash-rich buyers maximising on traditional hotspot bargains
Over the last decade there has been a growing trend towards buying in far-flung and emerging destinations, often to capitalise on rising property values. However, in today’s economic climate, buyers have reverted back to traditional, established second home destinations and buying for lifestyle, rather than purely investment purposes according to the latest results of a survey carried out by Savills International and HomeAway.co.uk.
The HomeAway.co.uk survey has also shown that it has been buyers with a higher disposable income, and who are therefore less mortgage reliant, who have been responsible for this year’s purchases. Further, with house price decreases of up to 30% even in the most sought-after locations, these individuals have been able to invest in such high-end properties at a discount. The most popular 2009 second home locations have been southern France, Spain (the Balearics) and Portugal’s Algarve region.
“In 2010, the overseas second home market will be characterised by cash-rich, lifestyle buyers benefiting from lower prices in traditional, established holiday home hotspots.” Says Charles Weston-Baker, Head of Savills International.
Rebecca Gill, research analyst at Savills International comments. “Whilst UK overseas home ownership has doubled since 2001 recent global recessionary trends have seen take-up levels dramatically slow. Factors such as fewer overseas holidays, reduced leisure spend capacity and financing availability, unfavourable exchange rates and declining house prices have impacted second home purchasing activity.”
A fifth of all respondents reported that they are considering or planning additional holiday property purchases in the future, demonstrating that despite the climate, the attraction of overseas investments has not disappeared. However, it will be essential for market conditions and mortgage availability to improve, in order to support any volume of future purchasing activity.
When asked about where they would intend to expand their property portfolio, respondents named the following top ten destinations, including traditional favourites France, Spain, Portugal, the US, Italy, Greece and Cyprus, followed by Morocco, Brazil and Turkey respectively.
Courtney Wylie, General Manager at HomeAway Holiday-Rentals comments, “Traditional holiday hotspots are among the top performing destinations on our site, with places like the Cote d’Azur, Malaga Province, the Balearics and the Algarve all being great options for reliable rental returns. For anyone hoping to rent, it is essential to research the tourist market first, particularly when considering emerging markets. Access to the destination should also be considered. For example, reliance on one airline is not ideal as route cancellations could have a big impact on bookings.”
Results were taken from an online survey of UK overseas second home owners attracting 1,200 respondents conducted in 2009 by Savills International Research and HomeAway.co.uk.