Global real estate brokerage franchise network Berkshire Hathaway HomeServices released its first report on luxury real estate trends countries in Europe and Asia.
Brokerage leaders based in Greece, Italy, Spain, Portugal, the United Kingdom, India and United Arab Emirates provided insights on the trends shaping these markets in 2023.
Here are some of the highlights:
Golden Investor visas spur flight to European real estate
The Greek government announced in 2022 that the minimum investment to obtain a visa doubled to 500,000 Euros in popular destinations such as Athens, Mykonos and Santorini.
Greek citizens are being priced out of the market, in part because overseas investments inflating prices, which is also affecting the vacation rental market. Due to the growing demand, Kyriakos Xydis, managing partner of BHHS Athens Properties, said visitors to schedule their vacation rental properties a minimum of six to nine months in advance.
Meanwhile, BHHS entered Italy in 2019, serving clients in Milan and last year, expanded into the country by entering the capital city of Rome.
Managing partner and office manager Marcus Benussi of BHHS MAGGI Properties Agency said this is a good time for overseas buyers to invest in Italy and its coastal properties. Not only is the government incentivizing foreign investors but generational changes are also putting legacy properties like castles on the market.
The rise in such properties is due in part because the younger generation is avoiding generational real estate that is often difficult and expensive to maintain. They prefer to rent smaller properties that are more manageable, according to the report.
“We have more castles available, or other special properties, than apartments in Milan right now,” Benussi said. Most incentives are geared toward newcomers at the moment, he added.
In Portugal, there’s renewed interest in the country’s real estate since new regulations for the golden visa program went into effect in January 2022.
Although investments in residential real estate in high-density areas were limited, overseas buyers can still purchase commercial properties in those areas, as well as residential properties in low-density areas.
“Portugal’s Golden Visa requirements may have changed recently, but that’s not slowing interest from investors and the demand for property in Portugal by foreigners is higher than ever,” the report said.
Cesar Santos, CEO of BHHS Atlantic Portugal, says buyers have been interested in areas like Lisbon, Alentejo, and Comporta in the last decade, shifting their focus from popular places like The Algarve that were in demand 20 to 30 years ago. Cities like Porto and Aveiro are also receiving high demand.
Spain is another hotspot in Europe at the moment, with25% of all real estate buyers in the country from other countries, the report said.
Spain also offers the golden visa program, allowing foreigners to invest in real estate. Spanish banks are also well-versed in offering mortgages to foreign buyers, with loan values up to 60% and a processing time of up to 20 days. However, there is a dearth of inventory of luxury properties, a trend that started during the pandemic.
In recent years, London saw an exodus of ‘lifestyle buyers’ but then a reversal of the trend as those who moved out faced issues living out in the country. It also disadvantaged them as they had to rely on “oversubscribed train services” as offices opened up and demanded in-person meetings.
The media at the time called it a “mass departure,” but it was actually a small population who left the city during the pandemic, said Cliff Gardiner, head of sales at Berkshire Hathaway London Kay & Co. and BHHS Marler and Marler.
This led to a hike in prices in areas that traditionally had not seen such spikes in the past. Gardiner said a lot of reassurance goes into convincing buyers as the property market picks up in London that they will not see further price falls during this “flat economic cycle and period of relatively high inflation.” Gardiner says it is a suitable time to trade up in property when prices are flat and the market is “relatively calm.”
“The buyers are out there,” he said in the report. “We’re just working a lot harder than in previous years to get transactions over the line.” He also expects a positive economic cycle to ensue as 2023 progresses.
What makes Asia lucrative to foreign buyers?
According to the report, buyers are eyeing commercial investment in India, focusing on infrastructure development, improvement in logistics, an expanding tech industry, and a fast-growing economy.
Sanya Aeren, chief advisor, marketing and communications at the branch, says she has observed an increase in foreigners acquiring real estate on the subcontinent.
“This is India’s story. There is so much work to be done, but this is the next frontier,” added Shrey Aeren, the owner of BHHS outpost Orenda India.
In the Middle East, Dubai is a a popular tourism destination and a coveted region for expats and second-home buyers.
“Not a week goes by without a U.S. Realtor visiting Dubai, calling and asking for more information on Dubai real estate,” said Phil Sheridan, CEO of BHHS Gulf Properties, who says tax advantages is one of the most coveted incentives in the UAE.
To apply for an investor visa in Dubai, one has to invest $200,000, Sheridan explained. A $540,000 investment can potentially secure the visa, after which the investor can stay and work in Dubai without needing an employer to sponsor them.
Artificial islands archipelago Palm Jumeirah is a popular spot, the Sheridan says, which attracts high net-worth individuals and has driven up property prices in the last year.
BHHS currently operates in four continents and 12 countries, with more than 50,000 real estate professionals and nearly 1,600 offices, representing more than $154.7 billion in real estate sales volume.