If you’re looking to sell overseas property in Europe, you should market it aggressively to Americans. US nationals have recently emerged as among the biggest buyers of real estate in Spain, France, Portugal, Greece, Italy and other European countries.
There are several reasons for this. Americans have always been fascinated with Europe, especially with Italy, France and Spain. American tourists can be found everywhere in these countries. At some point, there is a desire that builds up to stay in these countries on a more permanent basis.
The last couple of years have seen the US dollar become the strongest currency in the world, and this has been at the expense of the Euro, which has never been weaker. The Dollar/Euro exchange rate is skewed in favour of the US Dollar.
This means Americans who want to buy a villa or an apartment in Spain, France, Greece, Italy or Portugal have more buying power than ever before. Also, there has been a substantial drop in property prices in Europe compared to 8 or 9 years ago. For US buyers, this is a once in a lifetime opportunity to get the European property that they had always dreamed about.
Indeed, as one American buyer who bought a villa in Tuscany says, he got his property for 20 percent over the original listed price and was able to save 40 percent because of the advantage that the strong dollar holds over the weak Euro.
So he bought an 8,000 square feet home on 9 acres of land in the heart of Tuscany, Italy, considered to be one of the most beautiful places in the world, for a bargain price of $1 million.
After a decade of disinterest, favourable conditions have compelled many Americans to look at investing in Europe. Many wealthy Americans have bought holiday homes in some of the most beautiful regions of the world.
Erin Koops, executive vice president at a Chicago based real estate company says, “If we compared data through the end of the third quarter of 2015 with the same period the prior year, the growth of U.S. home buyer interest in Europe is up 180 percent.”
The countries that have been the biggest recipients of American investments are France, Italy and Spain. The fourth spot is a virtual tie between England and Germany. Each of these countries have their own unique attractions, but the common factor in all purchases has been the stronger dollar.
But this may not be the case for too long. As Daragh Maher, who works as a currency strategist at HSBC in New York, explains, “The consensus expectation is that the dollar will be at $1.06 to the euro at the end of 2016” — it now hovers around $1.10 — “but will remain broadly stable until then. If you believe that outlook, the exchange rate is less of a factor to consider.”
“What’s changed is that the market is not as pessimistic about the euro now, but that has created a helpful combination. Affordability has improved, but stability in the euro means you’re not so worried about where you’ll be in 12 months’ time with a euro asset,” Mr. Maher adds.
Paris is the most popular city with US buyers who hold a very romantic view of it. Many buy an apartment in Paris and immerse themselves wholeheartedly into French culture.
As Marie-Hélène Lundgreen of Belles Demeures de France, an organisation of French luxury real estate brokers explains, there has never been a better time to buy an apartment in Paris: “It’s a very good market now for Americans and dollar-based buyers,” she explains, adding that because of the massive American interest, the inventory has dropped 25 percent in Paris.