On a chat to Italy. Interest in buying foreign real estate is growing, and the income from their rental is also higher

• According to experts, now is a good time to buy European holiday properties

• Investor capital will grow fastest in Berlin. They earn the most on rent in Tuscany and on the south coast of France

• Interest in buying European real estate is also growing on the part of Americans. They are attracted by favorable prices, which are the result of a weakening euro and a strengthening dollar

If there’s one thing the Czech nation can’t deny, it’s without a doubt a passion for chatting, which was further supported by the pandemic and the travel restrictions that came with it. After all, according to a Raiffeisenbank survey, around 15 percent of Czechs own a vacation property. And it’s definitely not just cottages in Šumava. Due to rising inflation and domestic property prices, more and more people are preferring the real estate market abroad, and according to experts, the ideal time to buy is right now.

According to a new survey by international real estate agency Knight Frank, the prime European real estate market grew by 5.6 percent last year due to increased demand. And the rental income itself is higher. Especially with regard to the most popular holiday destinations.

“For second-home owners, European cities offer culture, connectivity and a good quality of life, while investors are attracted by strong tenant occupancy and relatively low acquisition costs,” explains pro CNBC head of international research Kate Everett-Allen, according to which interest is currently spreading across the Atlantic.

More expensive than world capitals

Although in the midst of rising inflation, foreign real estate may seem like a good way to get value for your money, it should be remembered that the same advantageous conditions certainly do not apply across Europe. In addition, it also depends on the intention with which the trade in question is concluded. If the investor’s goal is capital growth, Western Europe is the ideal location, according to Knight Frank.

The Adriatic is a little different. Cheap Albania attracts Czechs to invest in real estate there, an apartment on the beach can be bought for two million

As the company itself mentions, price growth in the best European markets was the highest in the world in the past year. It was most pronounced in Berlin, where high-end real estate rose in price by 12.6 percent. This places the German capital ahead of world cities such as New York (7.3 percent), Hong Kong (3.1 percent) and London (2.5 percent).

Elsewhere, price growth was strong exclusively in luxury real estate markets, which have continued to rise despite rising interest rates and worsening economic conditions. This trend is most noticeable in Edinburgh, where there was an 11.2 percent increase. It is followed by Dublin with Zurich at 10.2 percent and finally Paris. There, prices rose by 8.9 percent.

“Rising mortgage rates and a weakening global economic outlook are cooling some of the momentum of the past two years. However, the slowdown will be most felt in the lower price categories and in markets that are intended for domestic clients,” Knight Frank reports.

For income to the Mediterranean Sea

Other recommendations then apply if the interested party wants to rent out the holiday property. Under such an assumption, the region of the Mediterranean Sea, popular with tourists, turns out to be the most lucrative. Specifically, for example, the Italian Tuscany, which accounts for two-thirds of the demand for real estate in the whole of Italy. After all, it saw a year-on-year increase of 30 percent in 2021 alone, with the city of Lucca on the Serchio River being particularly popular. Last year, a quarter of buyers’ requests were directed there, which caused year-on-year growth of six percent.

According to the Knight Frank company, the average price of properties that interested parties are looking for in Lucca and Pisa is currently around 1.7 million euros (roughly 41.9 million crowns). For comparison, buyers normally purchase real estate in the Tuscan region for 3.7 million euros (91.2 million crowns). The average rent is 471 euros per day (11,610 crowns).

In addition to Italy, the real estate agency also mentions locations in France, specifically the French south coast and the Alps. It is also worth investing in the purchase of a rental property in Barcelona, ​​Spain, Marbella and the Balearic Islands.

Investing in real estate is still worthwhile, even if their appreciation will not be the same as in previous years, according to real estate experts

This year, experts expect increased interest also from American investors, for whom European real estate is becoming more attractive also due to the strengthening dollar and weakening euro. This is currently trading at near parity with the dollar, which in other words means US buyers will save roughly 15 to 20 percent compared to July 2021. And that in any of the eurozone countries.

Knight Frank has already noticed this trend. In the first five months of this year alone, it saw a 37 percent increase in interest in French real estate from American buyers. In addition, they generally stop being interested only in cities typical of rich culture, such as Rome, Paris, Barcelona and Florence. “We’re seeing them focus on the traditional areas of the sun belt, which is a departure from the norm,” said Mark Harvey, head of international affairs at Knight Frank. Their interest is also growing in destinations such as Mallorca and Sardinia.

According to Everett-Allen, head of international research, the further development of the situation will depend on the steps taken by the US Federal Reserve System, which tightens monetary policy faster than the European Central Bank. “Further rate hikes by the Federal Reserve will lead to further strengthening of the dollar against the euro, which may lead to greater discounts for US buyers,” he concludes.

–