As record numbers of Greek, Italian, French, and Spanish investors begin the search for stable outlets in which to secure their earnings, the world-wide property market is set to receive a welcome boost.
Whilst the fleeing of native investors can only mean further decline for struggling Eurozone countries, several nations are already seeing signs that their own economic growth is likely to receive a helping hand from panic-buying European investors.
British Property Investments: London Calling
Recent statistics show that record numbers of purchasers from Greece, Italy, France, and Spain are showing interest in British property, particularly in London.
London has remained a property hot-spot throughout the British recession, with property prices increasing by 5% last year, despite housing prices in other regions of the UK remaining stagnant or even dipping as the recession continues into its fifth year.
The capital remains one of only a handful of ‘safe bet’ areas in Europe when it comes to investing in property and, as such, has seen rapidly increasing numbers of European purchasers registering interest in prime central areas. The number of properties owned by Italians, for example, has nearly doubled in the space of a year (7.6% of London houses are now owned by Italians, as opposed to 4% in 2011).
Increased Home Equity and Larger Overseas Holiday Home Market
This flood of investment into the British property market may prompt an increase of interest in other markets, too, with its effects on wealthy British home-owners being two-fold: as the rich in Britain become wealthier due to increasing equity in the country’s larger and more expensive homes (which are typically the type being snapped up by foreign investors), the market for investment in overseas holiday homes further afield grows.
Recent reports suggest that the number of Brits selling holiday homes in troubled European destinations, which would traditionally have been the retreat of choice for many British families, has increased by 50% as they flee the rapidly collapsing economies of those countries.
With many areas of the US, including popular holiday destinations such as Florida, currently at the lowest they are predicted to reach, now is the ideal time for both British and European holiday home investors to put their cash into an American property that would have been financially out of reach for many of them a few years ago. UK interest alone in overseas markets rose by 35% in 2011, a trend likely to be following by its European neighbours as the Euro declines further.
Eurozone Crisis and Investments
What does all of this mean? In a nutshell, it means that destinations outside of the troubled Eurozone are likely to see their own economies bolstered by growing overseas interest in potential investment properties.
Bailey, L. Prime Central London Sales Index (2012). Accessed June 20, 2012.
Overseas Property Guide. The Overseas Property Market in 2012. (2012). Accessed June 20, 2012.
Beugge, C. Brits say au Revoir to Holiday Homes. (2012). Accessed June 20, 2012.