It’s been a bruising few years for European homeowners, who’ve seen their finances buffeted from all sides by the cost-of-living crisis and financial uncertainty.
At Smart Currency Exchange, we know that the road to buying foreign property is paved with difficulty. That’s why we’re using this blog to look ahead to the key themes for 2024 and to provide an outlook for the continental real estate sector. You’ll also find some tips on what you can do to navigate risk and benefit from a couple of enticing opportunities.
If you would like to discuss any of the below or have any further questions, we’re here to help. Why not book a call back with one of our dedicated traders today?
European property prices
The pandemic prompted a gold rush in European real estate, as lockdowns and the threat of the virus made frustrated holidaymakers dream of their idylls. But the boom in real estate prices is now over. After declining in 2023, S&P forecasts a further drop in prices for most European markets in 2024. Italy, France, Ireland and Portugal are expected to see nominal house prices fall by more than 3% next year.
This means that it’s never been more important to speak to your trader. Due to the price cuts, any change to the exchange rate could mean that you’d be paying significantly less for your dream home than you would have at the height of the pandemic. The opportunities are out there, so please don’t hesitate to speak to our team to help you make the most of the correction.
Mortgage rates in focus
Borrowing costs have been a key theme in recent times, as central banks raise their interest rates in an attempt to tame runaway inflation. All eyes will be on the European Central Bank (ECB) – the institution which holds the levers to lending rates in the eurozone – with many people now expecting interest rates to go no further.
This is good news for prospective homeowners. Lower interest rates mean you’ll make lower monthly mortgage payments and could also mean that banks will be willing to lend more money. Stay tuned to our daily currency updates, as well as our quarterly forecast if you’d like to follow interest rates in greater depth.
Mind the gap
Of course, buying a property in Italy is very different from buying one in Cyprus, for example. Certain countries have longer maturity mortgage products, while others have a higher percentage of fixed as opposed to floating rate mortgages, or vice versa. Some countries will be more exposed to changes to the economic landscape, as the UK found with its comparably high rate of short-term, fixed-rate borrowers.
Property trends and buying processes differ greatly from country to country, which is why it’s vital to have all the information you need before putting in an offer in 2024. Don’t hesitate to give our experts a call today. Our partners work alongside local estate agents in every key market, meaning we have our ears to the ground when it comes to your next home and can help you navigate any difficulties you encounter.
Climate
This one’s a bit of a curveball, but worth considering if you’re interested in buying a property in a warmer area. As European weather patterns become more unpredictable, buyers have started to shift away from the traditional suntraps in the south of Spain and towards cooler climes, such as the north of Germany.
There’s nothing to suggest that these regions will become irrelevant anytime soon, but it’s worth considering the risk of future heatwaves should you be on the hunt for a sunny escape. Any shifts away from traditional holiday hotspots will be watched with interest in the year ahead following the record temperatures and wildfires seen last summer.
As ever, Smart Currency Exchange is here to help, and our team of experts is always on hand to help you capitalise on the opportunities that 2024 has in store.
