This was mainly led by better economic news in some of the countries where potential buyers were situated (UK, Germany and Scandinavia) and the continuation of low interest rates.
FRANCE – More properties seem to have been built and purchased, and there are potentially new areas of development. Interest rates dropped even further due to European Central Bank rates being reduced. Mortgages are still available up to 80/85% loan to value.
SPAIN – As ever, Spain remains popular and there are signs of possible new developments being built and unsold projects being resurrected/renovated, but in the latter case you should ensure all the relevant planning permissions and building/habitation licences are in place.
All the island groups – Balearics and Canaries - are showing an increasing interest too. Similar to France, interest rates are low, but loan to values are not as high, maximum 60% to 70% and lender underwriting remains very tough.
USA – Interest continued to be high in the most popular states/areas, such as Florida, California and New York, with interest growing in other areas such as Colorado, Texas and South Carolina, but with the cheaper properties you have to be careful what you are purchasing and the future saleability. Interest rates are also quite low and maximum loans to value vary between 70% and 75% dependant on the State and type of property being purchased.
Countries which are also popular and continuing to grow:-
GREECE – Even though its local economy is still suffering, interest is growing for properties in both the mainland and islands. It is still very restrictive on any lending available (unless the property is valued at least over £1 million), but there are signs this may improve during 2015.
ITALY – still flourishing, with Umbria and Tuscany becoming more popular again. Interest rates are low (but not as low as France and Spain) and loan to values are still between 60% and 70%.
PORTUGAL – Continues to show an increase in sales, not just in the Algarve, but also Lisbon and the Silver Coast areas. Mortgages are now available up to 80% on a case–by-case basis, and it also benefits from the current low Euro interest rates, but are high when compared to France and Spain.
TURKEY – Still offers “value for money” with lower priced properties when compared to other parts of Southern Europe. Interest rates continue to be high compared to others and mortgages are available between 50% and 75%, dependant on an applicant’s location and financial status.
The following countries are popular, but tend to have more interest from Middle and Far Eastern clients rather than Europeans:-
AUSTRALIA and NEW ZEALAND - seem to be popular either as a holiday home or by ex-pats planning for their future retirement. Interest rates are high compared to Europe, maximum loan to value 70% to 75%.
SOUTH AFRICA - Good value, low priced properties, but maximum loan to values restricted if you are a non-South African, with 50% loan to value rate possibly rising to 80% if you are a South African ex-pat. Interest rates are also high at between 8.50% and 9.50%, only available in Rand.
THAILAND – Very restrictive in what you are allowed to purchase as a non-Thailand National (generally restricted to condo type properties only), but there are low priced properties available. Loan to values up to between 70% and 75% and interest rates on a par with Turkish interest rates.
Other areas showing an increase are as follows:-
ALPINE PROPERTIES – With skiing becoming more and more popular, property sales in all the main skiing areas seem to have increased – such as French and Italian Alps, Austria and Switzerland (restrictive lending here on a case-by-case basis) and Colorado.
CAPE VERDE – did not take off in 2014, but there is still hope that this destination will become as popular as the Caribbean (which shares a similar climate) and has potentially good value properties. Mortgages are still difficult to obtain.
CARIBBEAN – especially the following Islands: Antigua, Bahamas, Barbados and Dominic Republic. Mortgages possibly available but minimum loan $250,000. Also Aruba, but the minimum mortgage available here is $1 million. In all areas maximum loan to value is 50%.
EASTERN EUROPE – Croatia, Czech Republic and Poland seem to be popular either as a holiday home or by ex-pats planning for their future retirement. Prices are low compared to Western Europe, but there may be legal issues, so therefore advisable to take independent legal advice.
All lending terms depend on a client’s personal financial status, valuation of the property, location and type of property, plus loan required.
Words: Overseas property and finance specialist Simon Conn
