Helping You Build a Life Overseas

The Overseas Guides Company Quarterly Index – October 2014

Overseas property market still growing in 2014, but starting to plateau

Interest in buying overseas property in 2014 remains comfortably ahead of 2013, although there is evidence of growth levelling off during the third quarter. This follows a number of economic and political developments throughout September, which appears to have had
a knock-on effect on consumer confidence and property-buying behaviour across Europe.

Still growing, but at a slower rate

The Quarterly Index measures the number of enquiries
via downloads of their country-specific buying guides, such as
Between January and September 2014, there was an increase in enquiries of 17 per cent compared to the same period last year, rising from 29,299 to 34,287. For the third quarter of 2014, enquiries were up by 4.1 per cent year-on-year, from 10,518 to 10,957 in Q3 2013.

A busy start to 2014

After a bullish first half of the year, there was a cooling off of enquiries during the third quarter – this compares to the previous two years, when Q3 has always outperformed the first two quarters. The months of April to June continue to be the most popular months for would-be homebuyers to view and complete on overseas properties.

Economic impacts

Enquiries between July and September fell by 9 per cent compared with the second quarter
of 2014; and by 5.5 per cent compared with the first quarter. The reason for this drop could have been the Scottish Referendum in September, the month with the lowest amount of enquiries in Q3. Undoubtedly, the uncertainty of the referendum’s outcome caused nervousness in the economy, with ripple effects felt across Europe.
This uncertainty prompted a significant number of individuals to put their plans to buy abroad on hold. It also led to a momentary loss in value for sterling, which would have deterred people further from purchasing or moving abroad, at least until things had settled down.

Further growth in key markets

Looking ahead, continued growth is expected in the key markets, with mortgage rates
in the Eurozone remaining at historic lows and sterling likely to maintain a comparatively strong value against the euro. There is also a sentiment that the bargain prices of homes in popular parts of Spain, France and Portugal won’t last forever, with signs that hotspots are already seeing slight price rises – buyers don’t want to miss the boat. The recent Readers Survey showed that Spain, France and Portugal
are the most popular countries for those considering buying property abroad and with
those readers who already have a second property.

Spain still a favourite

Spain is still by far the most popular country, generating 2,710 enquiries in the third quarter, compared to 2,494 enquiries in the third quarter of 2013. It’s a good time to be purchasing property in Spain – mortgage rates are low as a result of the European Central Bank’s low set base rate, and there is increased push on attracting foreign buyers to Spain. This has resulted in the chance to pay only a 30% deposit up front and interest rates of only 3-3.5% or less.
The Spanish economy is certainly picking up – the International Monetary Fund has recently announced that the southern European country will lead the rest of the EU in terms of economic growth over the next year; the economy is expected to grow at 1.3% in 2014and continue by 1.7% in 2015.
What’s more, there’s great news for those looking to purchase a property to rent out for some or part of the year - leading holiday rentals website HomeAway Inc. recently surveyed holidaymakers from the UK, France, Germany, Italy and Portugal on the most popular areas for holiday rental accommodation during June – September 2014, with Spain receiving a 14% rise in demand; in fact, the Costa del Sol was consistently in the top three for four of the five nationalities surveyed.

France remains popular

France remains a firm favourite in second place with 2,575 enquiries. Not only have house prices across the country remained stable over the last year, with average prices even falling in some areas, but France is also now offering interest-only mortgages to non-French residents.

The ones to watch…

Star performers in the third quarter in terms of growth were Italy (12.7%), Greece (52%) and Turkey (8.5%), all of which saw rises in enquiries compared to the previous quarter. This year, a reduction in the taxes paid during a house purchase have made it easier to buy an Italian property – adding to the already popular lack of inheritance tax and no Capital Gains tax after five years. Turkey has achieved growth despite the rocky political landscape in the country, suggesting that financially savvy overseas property buyers are flocking for bargains during this time period. The mammoth growth experienced in Greece reflects data from the country indicating that foreign buyers have doubled their investment in Greek property (mainly holiday homes) in this time – property prices here are still around half the cost of the 2007 market peak.

Get help buying property overseas

If you are thinking of buying a new home or a second property overseas, and would like guidance on what to do next, contact the Resource Centre
on +44 (0)20 7898 0549 or email