UK overseas property buyers’ money currently goes furthest in Florida but property in the eurozone is currently 6% cheaper than six months ago because of exchange rates, a new annual survey shows.
In Orlando in a £125,000 budget can purchase a four bedroom home with a large garden and a private pool, compared to a studio apartment in the Swiss Alps, according to the first HSBC Overseas Property Report.
Florida’s property market has reached the bottom since the real estate bubble burst in 2006, with prices just starting to rise again, enabling foreign buyers to obtain a relatively large home for their budget, which is boosted by a favourable exchange rate and low level of purchase taxes and fees, says the report.
The pound to euro exchange rate has increased the most over the past six months, largely as a result of the on going Eurozone crisis. It is up 5.7%, giving buyers with a £125,000 budget €8,563 more to spend.
This will particularly benefit those looking in Cyprus and Portugal as purchase taxes are comparatively low. Currently the Costa Blanca in Spain, offers the most space for money in Europe, the report adds.
For a budget of £250,000 buyers could get a six bed house in Orlando, a four bed house in Alicante in Spain, a four bed house in Bodrum, Turkey, a three bed house in Malaga on Spain’s Costa del Sol, or a three bedroom house in Paphos, Cyprus.
The same money could get at two bed apartment in Faro on the Algarve in Portugal, a two bed apartment in Pisa, in the popular Tuscany area of Italy, a two bed apartment in Palma de Mallorca, a one bed apartment in Nice on the Cote d’Azure in the south of France or a one bed apartment in Gryon in the Swiss Alps.
‘There is a huge discrepancy in the size of property that UK buyers can purchase on the same budget in some of the most popular overseas locations for second homes. This is a combined result of foreign exchange rates, tax levels and the strength of the property market,’ said James Yerkess, HSBC head of FX.
‘Orlando, for example, offers excellent purchase power right now, but European destinations vary and aspiring buyers who are more flexible on location should weigh up their options to secure the most space and best facilities for their money,’ he added.
The report also shows that Spain’s Costa Blanca offers most space for money in Europe. So £125,000 will buy a three bed house with a shared pool.
Purchase taxes and fees are highest in Italy at approximately 13%, leaving only £110,619 of a £125,000 budget to spend on the property. However, Tuscany comes seventh out of ten on the purchase power chart.