Support for the pound weakened over the course of the last week as the initial boost from the government’s lockdown exit plan announcement faded.
However, with restrictions easing overseas property sales are coming back.
The property website A Place in the Sun revealed in a recent survey that 38% of participants had reported that their plans to buy property abroad were left unaffected by the Covid-19 crisis, while twenty percent said they were more motivated than ever before. This suggests property purchases and residence overseas is expected to grow in the upcoming months.
So, where are the new property hotspots? And where can you find stable investment opportunities in the new economic climate after Covid-19?
Portugal – a post-coronavirus paradise?Portugal looks set to stay an expat favourite when buying property aboard after coronavirus. Portugal offers attractive financial incentives with a 10-year non-habitual resident (NHR) tax programme, meaning you only pay 10% tax on foreign pension income, far lower than other countries.
Settling in Portugal is also about lifestyle and location, which Guarda boasts at a great price. Guarda is a short drive from the Serra de Estrela mountain range with nearby stunning natural parks and a ski resort.
Architecturally, think red roofs and narrow streets in its historic centre making it one of the most striking places to live in Portugal.
Guarda offers incredible value. Data from the Association of Professionals and Companies of Real Estate Mediation of Portugal (APEMIP) show average prices are around €761 per square metre (that’s three times cheaper than Porto and six times less than Lisbon).
The coastal village of Comporta is also another likely Portuguese post-Covid hotspot. At just an hour’s drive from Lisbon, you have the best of cosmopolitan and rural beach life.
Described as an “under-the-radar gem” and well known for its “chic beaches”, according to The Daily Telegraph, homes around the village can cost anywhere from around €500,000 to €10 million.
Moving to Portugal would be an excellent choice going forward as house prices are expected to remain generally stable, and with the added tax benefits, growing safe-haven status, and the Mediterranean climate, it’s likely to become increasingly popular.
Cyprus – a post-Brexit safe-haven?Cyprus is emerging as a European property hotspot post Covid-19 because of low coronavirus cases and Brexit uncertainties are leading investors to seek out countries in the European Union.
Christopher Nye, senior editor at Property Guides, comments: ‘The Brexit transition period is still due to end on December 31. Many think it may be delayed, but by no more than a few months.’
‘Anyone wanting to retain their current EU rights to residence, healthcare and pensions in Spain, France and other EU countries will need to be resident by then. So as soon as you can fly, this summer will be a great time to retire to the sun and buy a bargain property abroad.’
Cyprus’ special geographic position in the Eastern Mediterranean while being a member of the EU makes it an excellent choice. Also, boasting one of the lowest Covid-19 infection rates compared to Europe adds to its appeal.
Importantly, many analysts believe property prices will drop post-coronavirus, but not for long.
Hotspots like Ayia Napa will likely be at full capacity this summer when lockdowns ease. Nevertheless, the rest of the island offers bargains and a quieter life with developments in the south near Limassol appealing to investors.
The French Riviera and the Medieval splendour of MouginsAnother hotspot will be the French Riviera, which has always been a big hit with property buyers. But with the economic uncertainty we’re due to face in the coming years, property prices in this usually pricey region could come down.
ERNA Low Property is showing prices ranging from €223,000 for studio flats and one-bedroomed flats from €252,000, while two-bedroomed flats can be found for the relatively reasonable price of €293,000. Many of the apartments have access to a swimming pool and nearby access to cutting-edge shopping centres, cinemas, and much more.
The project for many of these apartments in the Coeur Mougins development are set to be completed by 2021, with average property values spiking up to around 2%-3% year-on-year. So, if you’re thinking of moving to the French Riviera post-coronavirus, you could find a home amongst Medieval splendour in Mougins.
Spain’s Costa del Sol, a fast-growing market for a post-Covid worldThe coronavirus pandemic has profoundly affected prices of luxury property in Spain. In fact, property in the Costa del Sol has fallen by a whopping 20% according to the luxury real estate agency, Barnes.
Nevertheless, with Spain’s fast recovering economy, the “new normal”, and reopened borders, there’s set to be a large influx of expats to boost Costa del Sol’s real estate market.
Jeremy Lauwers and Marie-Laurence Van de Berg, managing partners at Barnes, Marabella, said: ‘The international buyer will once again return to this part of Spain thanks to its cultural, sporting and social attraction.’
‘Furthermore, as far as the health crisis is concerned, the reputation of Spain and mainly of the Costa del Sol will not be affected, due to the excellent crisis management of Andalusia, a region with fewer confirmed cases per 100,000 inhabitants compared to other parts of Spain.’
Another good reason for moving to Costa del Sol is its price stability, with properties selling from around €3,900 per square metre in West Marbella, while more luxury villas found in Nueva Andalucía can be sold around the average price of €4,200 per square metre.
Spanish Property Insight commented that Costa del Sol’s market has one major advantage over many others, saying that it “tends to bottom out of a property cycle before the rest”. As a result, many analysts and investors expect it to emerge with an upper hand when the global economy comes back into play at the turn of the new year.
Moreover, there have been some 200 new developments in the pipeline since January 2020, making the Costa del Sol a potential hotspot for 2021 and beyond.
What’s next?This property market downturn will be vastly different from the 2008/09 real estate crash, which saw properties in Spain, Ireland, and Costa Rica fall by a whopping 70%. This time it is expected to be shorter and less severe.
We will likely see an increase in properties in which you can live comfortably off-grid, or what has since been called the “survivalist” market for self-sufficiency.
Looking ahead to the end of the year and into 2021, many of us might be put off by the disruption caused in the global economy.
But a slowdown in property prices appears to be showing, and a return to normality in the housing market is expected so it may be better to explore property purchases sooner rather than later to find value.
Currencies Direct is one of Europe's leading non-bank providers of currency exchange and international payment services. Since we were formed in 1996, we've maintained our focus on providing innovative foreign exchange and international currency transfer services to corporations of all sizes, online sellers and private individuals. We have also expanded our services to provide dynamic and pioneering "business to business" solutions to help companies, tier 2/3 banks and other non-bank financial institutions to process their international payments. Our headquarters are in the City of London (United Kingdom) and we have operations in continental Europe, Africa, Asia, and the United States. Currencies Direct is jointly owned by private equity firms Palamon Capital Partners and Corsair Capital.