According to an article in World Property Channel.com, property markets around the world have been recovering over the last five years, but it highlights a new report from Savills which views getaway locations as giving the best growth over the next five years. The report is called Spotlight on Prime Residential Retreats.
During the economic downturn popular hotspots such as South Africa, the Caribbean, the Mediterranean and the Alps were all hit hard, but last year saw the turning point for these types of markets due to a renewed demand for leisure property. It’s anticipated that these types of locations will continue to see price growth of up to 10% this year, and prices could return to their former peaks by 2019. The recovery will be led by popular locations such as the Caribbean, Tuscany and the Balearics.
There are several reasons for this recovery, as it’s partially due to the fact that prime city properties are becoming more valuable, and as a result buyers are actively seeking out alternative real estate markets. Low interest rates in Europe continue to make overseas property loans more affordable, even though lending requirements are stricter. In addition some locations such as Antigua, Cyprus and Portugal are offering visas to purchasers buying property above a certain value, and this is actively boosting demand for retreats and resort properties.
At the moment the French Riviera is the most desirable and exclusive location for second homes and supply is extremely limited which means the long-term outlook for price increases is positive. Provence remains a popular destination, attracting buyers from throughout Europe, especially from the UK. The Southwest used to be known for renovation projects, but this market has just about disappeared. Chinese tourism is also expanding in France, and the Chinese have begun to invest in Bordeaux vineyards and in some hotels.
Prices for quality vacation homes have dropped by between a quarter and a third from their peak values in 2007, and at the moment there are still bargains available. The visa scheme in Portugal has been particularly popular and 318 visas were issued last year with 78% going to Chinese buyers. Properties at the luxury end of the market remain in demand, although there has been an uptick in demand for apartments and smaller townhouses. Ibiza has been the best performer in Spain, and prices of villas in the most sought after areas have completely recovered.