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Where To Buy A Property Abroad In 2020

property abroad
What are the prospects for the international property market in 2020.  Simon Conn has been an international mortgage broker for 40 years and sets out his view on which are the best places to buy in 2020.

Written for Expat Network by Simon Conn

 

In 2019 Simon Conn had a steady number of enquiries from people interested in purchasing a property abroad as exchange rates more or less stayed the same throughout the year. Some spikes were occasionally seen due to the Brexit date being moved around and people wondering if it would ever happen.

UK interest and exchange rates are still competitive and they are also getting enquiries from people from abroad looking to buy here.

Problems with the euro and US Dollar exchange rate has led to other countries coming to the fore and they are seeing more requests from South Africa, Canada, New Zealand and Thailand. These people have tended to be looking for holiday homes or future retirement homes.

With the Brexit deal soon to be done, the exchange rate should start to improve. There is a huge backlog of enquiries from people sitting on the fence, for example, once we are past €1.25 to €1.30 to the pound, Simon Conn say they expect to see an increase in the number of European mortgage enquiries.

They also anticipate that countries where they have been reluctant to lend in sterling, due to its volatility, will open up and allow UK applicants to borrow in those countries. Prime examples are Holland and Germany.

There has been a restriction in some regions, mainly smaller islands and countries, where the authorities try to control foreign purchasers coming in, to protect the locals from being priced out. Parts of Canada have started imposing restrictions in some areas.

Tourism is on the increase in Cyprus and Greece, and with that there has been an increase in interest from potential purchasers. However, borrowing in both countries continues to be difficult as they recover from their past economic problems.

Other areas are starting to open up and unusually Simon is receiving more enquiries in Eastern Europe, for example, Poland, Lithuania and Slovenia.  It is a problem, however, as there is limited or no lending in these countries to foreign based applicants. More building, restoration and regeneration is taking place and some of the interest can be attributed to the once communist states becoming more democratic. With any new development, it is imperative that independent legal advice is undertaken.

People must be aware that when they are buying a property abroad, there may be other costs involved to cover government taxes and legal fees. For example, in France, Italy and Portugal buyers have to allow up to approximately 10%-12% of the purchase price for these costs. In Spain it rises to between 12%-16%.

 

Here are the places Simon Conn expects to be popular in 2020.

France

New properties continue to be built and purchased, with other areas available for potential development. Mortgages are available at around 80%-85% loan-to-value, although better lending terms are available for loans of 70% or less.

Italy

Continues to flourish, with Umbria and Tuscany being particularly popular. Mortgages are usually offered at a maximum of 60% loan-to-value, although in some cases it can go up to 70%.

Portugal

The Algarve, Lisbon and the Silver Coast remain popular, with mortgages available up to 80% loan-to-value. Better lending terms are available for loans of 70% or less.

Spain

Spain remains as popular as ever, with new developments being built. Mortgages are on offer up to 70% loan-to-value, with better lending terms available for loans of 60% or less. The Canary Islands and the Balearics are popular, too, with loan-to-value rates similar to mainland Spain.

USA

The most popular states/areas are still Florida, California and New York, with continued interest in Colorado, Texas and South Carolina. Mortgages are available at 70% loan-to-value, or up to 75% in Florida.

 

Other places of interest include:

Alpine properties

With skiing becoming so popular, property sales in all the main skiing areas have increased, including the French and Italian Alps, Austria and Switzerland (note that lending here is restrictive and on a case-by-case basis).

Caribbean

The most popular islands include Antigua, Bahamas, Barbados and Dominican Republic.  Mortgages may be available but the minimum loan is $250,000. Aruba is popular but the minimum mortgage available is $1 million. In all areas the maximum loan to value is just 50%.

Eastern Europe

Prices are low compared to Western Europe, but there may be legal issues, so make sure you seek independent legal advice.

In addition to the above countries, Ireland, Canada and Malta also remain popular.

Finally, please note that all lending terms depend on a client’s personal financial status, valuation of the property, location and type of property and size of loan required.