Overseas property deals have become increasingly common in the era of globalisation, but buying real estate abroad can be a complex affair, with all parties involved in the process trying to make the most out of the agreement. Most investors and experts agree that it’s essential to use the services of a professional property agent since the legal frameworks governing property purchases by non-citizens can be difficult to negotiate. That’s why savvy agents, aware of the need to reduce costs for their clients, are increasingly looking for cheaper cross-border transfer solutions.
Where is this happening?
The UK is still among Europe’s leading nations when it comes to foreign property investments. Even though Spain and France remain Britons’ preferred destinations, cheaper markets with the potential for higher returns have also emerged in recent years, with deals tending to be concluded either in local currencies or in Euros. Bulgaria, Hungary and Romania have all established themselves as attractive options, partly due to economic uncertainty and social problems in several Western European counties. Now that the Brexit process has been triggered, searching for bargains abroad might become even more popular, depending on the rights that British citizens living in the EU retain at the end of the ‘divorce’ proceedings.
Another evergreen real estate market for European investors is the US. According to the annual survey of the Research Division of the National Association of Realtors, foreign buyers spent $102.6 billion on real estate from April 2015 to March 2016, investing in 214,885 residential properties. What’s more, foreign buyers bought properties that were far more expensive than the national average for existing homes sales in the United States – $477,462 compared to $266,683.
Europeans accounted for 18 percent of foreign buyers of residential properties, with UK citizens among the most active, sealing deals worth a total of around $5.5 billion. Brits were also, along with Germans and Chinese, some of the most active vendors of US residential property, indicating that property speculation continues to play a major part in the market.
What does the future hold?
According to Forbes, the trend for investing in foreign property is set to continue in the coming years. With Chinese nationals looking for ways to take money out of the country, Britons looking to secure footholds abroad, many Japanese continuing to leave the country after the Fukushima disaster, growing interest in ‘citizenship by investment’ programmes, plus increasing volatility on the commodity markets, bricks and mortar investments are likely to become increasingly popular. London, New York, San Francisco and Sydney are currently among the main targets for direct cross-border real estate purchases, and are tipped to dominate the market over the next few years.