European Real Estate To Fall In 2018

European Real Estate To Fall In 2018

European Real Estate To Fall In 2018
Areas of​ Europe popular with holiday home buyers could see property prices fall by ten per cent or​ more in​ the​ year ahead, according to​ overseas property specialists Tribune Properties.
2018 saw the​ first signs of​ a​ property slow down, and​ even the​ reverse of​ sharp gains in​ holiday home prices over recent years in​ Spain and​ Portugal .​
With owners unable to​ sell their property likely to​ drop their asking prices in​ 2018 to​ secure a​ sale, buyers will be in​ their strongest negotiating position since the​ mid to​ late 1980’s when prices dropped by nearly a​ third on the​ Spanish Costas.
Europe’s worst drought in​ living memory had an​ affect on the​ markets in​ Spain and​ Portugal earlier this year, with many would be buyers wondering if​ they would be able to​ use their pool in​ years to​ come, with consequential rentals possibly tailing off.
‘Some buyers rely on renting their holiday home out as​ they take out a​ mortgage to​ buy’, says Roger Munns of​ Tribune Properties, ‘and if​ they can’t rely on this it​ creates doubt as​ to​ whether to​ buy or​ not .​
Some buyers were taking the​ view that they should wait to​ see what happens’.
But it​ isn’t just the​ possibility of​ more droughts and​ unreliable rental income that is​ beginning to​ see prices drop in​ some areas, according to​ Tribune Properties.
The emergence of​ new European markets in​ the​ former Eastern Bloc has seen British, Dutch, Belgian and​ German buyers head for​ countries like Bulgaria where apartments and​ houses can be bought at​ a​ fraction of​ the​ price of​ Spain and​ Portugal.
‘Second home buyers are seeing properties offered in​ Bulgaria at​ less than half the​ price they thought they would need to​ own a​ home overseas, and​ the​ traditional markets of​ Spain and​ Portugal are losing out.
Already we have seen villas in​ Menorca drop in​ value by around ten per cent, and​ they could, and​ probably will, go lower still.
In addition the​ rate of​ new builds on the​ Costa del Sol and​ Costa Blanca hasn’t slowed down to​ any great degree, and​ before long there could be a​ price correction as​ there is​ going to​ be quite an​ oversupply in​ the​ market.’
European Tax Havens
In contrast to​ lower prices on the​ Spanish Costas and​ Menorca, Tribune forecast that prices on the​ Algarve and​ Malta are likely to​ stay steady or​ increase as​ their domestic markets are strong.
The two countries they see in​ Europe with growth potential for​ 2018 are the​ tax havens of​ Andorra and​ Monaco.
Monaco and​ lesser known Andorra both offer no income tax for​ residents, and​ Andorra has seen double digit property price inflation for​ the​ last two years, with the​ 2018 figures likely to​ match .​
After a​ slow start to​ the​ year Monaco has seen strong buying in​ the​ last quarter.
With the​ new government in​ Germany increasing the​ top rate of​ income tax, Tribune forecast demand continuing through to​ 2018.
‘Andorra and​ Monaco are small countries with little room to​ build new property’, says Tribune’s Managing Director Roger Munns, ‘Despite the​ German economy being slow for​ the​ last few years it​ remains a​ very important market .​
The raising of​ the​ top level of​ tax will mean more Germans seeking residency in​ a​ country with low tax levels .​
Andorra and​ Monaco are the​ two most likely candidates for​ them to​ buy in​ and​ take residency’.
Tribune’s advice to​ potential overseas property buyers is​ to​ find out how long a​ property has been on the​ market for, and​ to​ make provisional offers of​ between five and​ ten per cent off the​ asking price on a​ shortlist of​ three or​ four properties as​ one owner is​ likely to​ accept .​
Their longstanding advice is​ to​ always employ an​ independent lawyer to​ handle any sale and​ deposits.

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