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There’s been a growing trend of cash buyers dominating the European and overseas property market. What began as a trickle at the turn of the century has now turned into a flood.
Back in the past, it was only British and Scandinavian buyers who used to invest in properties in Europe, especially in Spain, Portugal and Greece. Now, we have Chinese, Russian, Middle Eastern buyers, eager to buy a second home or holiday home in Europe. And guess what – they are willing to finance the whole deal in cash!
This is exciting news for you if you are looking to sell overseas property fast. Indeed, Sotheby’s International Realty reported that 70% of its property listings in Ibiza, Spain were sold to overseas buyers on all-cash deals.
International property hunters are attracted by holiday villas and apartments that are priced between 1 million and 2.5 million Euros. Yes, they are willing to pay in cash for these properties and pay the quoted asking price. They don’t bargain, they don’t negotiate – they are simply in a hurry to complete the purchase as quickly as possible.
Isn’t that what you want as a seller? It’s every seller’s dream to get paid in full and in cash and in quick time. With a new class of multimillionaires and high net worth individuals from emerging economies such as China, Hong Kong, India, Singapore, Brazil and Mexico, that is now very much possible.
What motivates cash buyers to invest in properties in Europe and overseas? Well, they see property as one of the few investments from which they can not only make money from, but use at the same time.
Putting your money in a bank account is certainly safe, and a lot of high net worth individuals do park their assets in offshore bank accounts. But it gives them a really woeful return of 1% to 3%. Indeed, that return from bank investments is lower than the inflation rate in most countries.
Investing in stock markets makes a lot of sense. It is certainly possible to earn amazing returns from the stock market, but there’s nothing to guarantee that there won’t be a stock market crash, such as the one we had in the US in 2007 and more recently in China, in 2015. If that were to happen, the value of your investments would be wiped out.
That’s why cash rich investors prefer to invest in properties in Europe and elsewhere in the overseas property market, such as in Australia, USA and the Caribbean.
Investing in property is safe, as although the property market is known to crash once in a while, the loss in the value of your investment would be much less than it would be, had you put your money into the stock market instead.
The return on investment is much higher than putting the money in a bank as well, and can be anything from 5% to 15%. Plus, you can earn a rental income from the property by renting it out to tourists when you are not actually living there.
For this reason, there’s a huge demand for holiday homes in the Mediterranean – in Spain, Portugal and Greece. There’s also a huge demand for homes in Italy, France, Bulgaria, Cyprus, Malta and other European countries. Even the Caribbean Islands are doing very well, as are tiny tourism hotspots such as Cape Verde.
If you’re looking to sell overseas property you should definitely look at ways to take advantage of this trend.