Buying property in Europe could just have hit a sweet spot for British investors and expats as the value of the euro dives.
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The Pound has just hit a seven-year high against the euro, climbing to an exchange rate of 1.4 euros to the pound, an increase of around 15% over the exchange rate of 12 months ago.
That means the spending power of expats and investors now packs a real punch as property prices in many favourite hot spot destinations are at their lowest for some time, while owners and banks are ready to talk to cash buyers making sensible offers.
The bad news is British expats who want to come the other way are trapped in a stagnating housing market and some have slumped into negative equity, making their retirement years a financial nightmare.
Property professionals in France, Portugal, Spain and Italy try to talk up their markets, but all are practically standing still after years of losing value.
Market round up
Spain, the British expat favourite sunshine destination, has lost around 40% to 50% in home values since 2007 and has only recently bottomed out.
One of the country’s most popular property portals, Kyero, is reporting renewed activity in Spanish property and the site’s best month ever for traffic.
Cyprus and Portugal were both forced to take Eurozone bail-outs to stabilise their economies.
Many expat homeowners in Cyprus are embroiled in legal action against mortgage lenders and developers claiming they were sold duff Swiss Franc loans which have left them in a desperate financial situation as the value of the unpegged franc has soared against the euro.
For buyers, there may be no time like the present to buy as cheap again in the Eurozone as the European Central Bank is about to trigger a round of quantitative easing to print more money to boost the single currency area economy.
The results will not be instant, but already businesses and investors are reporting more confidence in the Eurozone and this will trickle through to the housing market over the coming months.
Official figures from Eurostat, the European Union statistics agency, shows house prices rose around 4% last quarter, but are still languishing around 45% below their 2007 peak.
In contrast, house prices in Britain have recovered from the losses that dropped off in the recession and are now starting to creep ahead of their former peak.
The bargains are out there, it’s just a case of tracking them down.
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