that the luxury London property market has
bounced back into business. According to
statistics, such an increase in sales is not a
one-off phenomenon in the UK and has been
witnessed after every election for the past 20
years. Whether or not anything like this soar
in interest will materialise north of the Watford
Gap remains to be seen.
Of course, it’s not only UK politics which has
an impact on the property market in either the
UK or overseas. Chinese government policy
encouraged overseas expansion and diversification into other countries when its home
residential market was depressed. No longer
only investing heavily in “gateway” cities such
London, New York and Melbourne, interest
has now moved geographically to provincial
capitals such as Manchester.
Spain, after years of a stagnated market, is also
now experiencing something of a recovery.
An improved economy, falling unemployment and a more stable banking system is
contributing to a renewed confidence and
interest in Spanish real estate with not only the
stalwart Brits and Germans returning but also a
notable US investment. Nevertheless, despite
this expected growth, economists still do not
expect the Spanish real estate market to ever
be as important to their economy as it was
before the crisis.
British ex-pats with relatively high levels
of disposable income are also looking at
returning to the UK real estate market with
estate agencies reporting interest from ex-pats
currently based in Russia, the Far East, the
Middle East and the UK, hoping to take advantage of the current economic recovery and
beneficial currency exchange rate fluctuations.
The recent surge in the value of Sterling, the
US dollar and Swiss Franc against the Euro
appears to have given a further boost to
Eurozone property markets from UK and US
buyers with a 2M Euro property today costing
less than £1.46M as opposed to £1.67M just
386
one year ago. And whilst the European
Central Bank’s decision to introduce quantitative easing may lead to a stronger Euro in the
long term, it is believed to have strengthened
confidence amongst Eurozone purchasers.
For Russian buyers, the dual politico-economic
effects of the Ukraine crisis and devaluation
of the rouble, had a negative impact on the
number of Russian investors in Europe with
the price of property pushed up by as much as
60%; their numbers are expected by some to
further dwindle in 2015.
Election results don’t always have a notable
effect, however; in contrast to the boost to
the UK property market post-ballot, the Greek
election result is said to have had little impact
on purchasers, although the current crisis is
clearly making property a risky asset.
Other politically and economically motivated
incentives also entice investors to particular
countries. “Passport Shopping”, as it’s
commonly known, may have its attractions for
certain investors who base their decision on
which country offers them the most attractive
residency or citizenship package in return for
investing in the local real estate markets.
A growing number of countries are offering
this including some European nations such
as Spain, whose government has been
actively courting overseas real estate buyers,
even introducing the so-called “Golden Visa”
programme for non-EU residents in 2013.
Some 500+ people have already taken advantage of the legislation, mostly Chinese, Russian
or Arab national investors according to data,
all of whom have put at least €500,000 into
property in order to qualify.
These schemes are not always popular with
local residents who may feel it devalues their
own status and question whether citizenship
is something that can be bought and sold. It
is considered that they can, however, benefit
both parties to the deal. The supplier countries of these investor visas (usually countries
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