Euro Against US Dollars- Buying Homes In Europe

Weak Euro Is Sending Some Foreigners On Buying Spree For Homes in Europe

The weak euro is an embarrassment for the European Central Bank, a drain on profits for American multinationals and a boon for Continental exporters. But for Candice Lichtenfels, owner of a New Mexico travel agency, it meant a great deal on an apartment in an 18th-century building in Provence.

She and her husband recently paid 450,000 French francs ($58,460 or 68,600 euros) for an apartment in Aix-en-Provence, the southern French town that was home to painter Paul Cezanne. "The low euro definitely played a part in our decision to buy. If it wasn't so advantageous, we wouldn't have considered it," says Ms. Lichtenfels.

With the euro down nearly 20% in the past year and a half against the U.S. dollar and almost 10% against the British pound, more and more American and British buyers are buying second homes on the Continent.

The Italian branch of RE/MAX brokerages gets two inquiries from North America every day -- double last year. John Taylor SA, a brokerage that specializes in high-end properties on the French Riviera, reports two or three referrals a month from Christie's affiliates in the U.S., compared to one referral every two months in the past.

"The currency is making a difference, absolutely," says Alexander Kraft, European regional manager of Sotheby's International Realty in Munich, Germany. "We really have a lot of interest from English buyers in Italian and Spanish properties. And there is also a lot of demand from the States. Demand has picked up in the months since the euro has weakened."

Europeans with property in the U.S. are also pouncing. Dario Castiglia, regional director of RE/MAX Italia, says Italians with U.S. property are eager to sell -- because every U.S. dollar they get yields more lire or euros.

Because of her travel agency, France-Vacances, Ms. Lichtenfels tracks exchange rates regularly. When the dollar moved above six francs about a year ago, she decided it was time to make a personal investment in a rental property, especially since she concluded that French property prices are at the beginning of an upswing. Fitting in her apartment search around business meetings, Ms. Lichtenfels found what she was looking for in July: A place with high, beamed ceilings and classic windows overlooking a small plaza with a fountain. By that time, the dollar had climbed near seven francs. Closing was delayed until September, but that merely translated into further savings as the dollar continued its rise.

Other trends are reinforcing the euro-related real estate buying by foreigners.

E-mail makes it easier for well-paid executives to stay in touch with their office from home. International travel connections are better. And transborder corporate mergers are boosting corporate travel to Europe from the U.S. "There is a need for high-management guys to be in Europe, and they can mix a little business with pleasure by having a villa in Tuscany," says Patrick Dring, head of the international residential department at Knight Frank, a U.K. property consultancy.

The renewed surge of British and American buying is fueling a comeback for classic 1950s vacation spots in France, Italy and Spain. Some brokers also see increased interest in Greece, which joins the euro in January. When it comes to luxury properties, "Greece's prices are among the lowest in Europe anyway -- you can get an oceanfront property for $1 million (1.1 million euros), which you can't do anywhere else in Europe -- and now there is the additional impact from the low currency," Mr. Kraft says.

That's what spurred Frankfurt investment banker Nikos Pappayliou to buy a beachfront vacation home south of Athens with dollar savings. "Thank you, euro," says Mr. Pappayliou, an American and Greek citizen. The dollar's increased buying power and Greece's falling mortgage rates ahead of euro membership made a great case for buying a place there, he says. "For me, this purchase is win-win, based on the euro exchange rate and the European Union," he says. The October closing on the 250,000 euro ($213,000) property, a four-bedroom duplex with a roof terrace, came at a time when the euro dipped under 83 cents.

For now, Mr. Pappayliou, 36, plans to use the property as a vacation retreat for his young family. But later, "that's my retirement home," he says. "When I get that small U.S. Social Security check sent to Greece, I am going to be very comfortable there."

Adrian Leeds, an American living in Paris for the past six years, just bought the apartment she had been renting, using dollar savings. "If the exchange rate had been the level it was when I moved here -- around five francs to the dollar -- I wouldn't have been able to do it," says Ms. Leeds, who owns a Web marketing company in Tennessee.

For American and British buyers well into their property search, the weakening euro means they can consider properties that are much more expensive than they had initially been looking for. And for those who already own, exchange rates offer an incentive to trade up. Tim Donoghue, an actor who lives in Washington, Connecticut, recently decided to trade his house in the French village of Dauphin for a 10-acre (four-hectare) property in Revest de Braousses. "Prices are escalating in France, and with the exchange rate so favorable, I thought it was a good time to sell the one house and buy a new one," he says.

A few European property sellers are striking back, though, and setting prices for their real estate in dollars. Dollar pricing is driven by increasing demand from buyers with dollars to spend, says Robin Rowls, broker at Diana Morales Properties in Marbella, Spain. "Of course, it's a double-edged sword, because pricing properties in dollars makes them less attractive to those who want to pay in euros," he says.

Source Reference: Euro Against US Dollars- Buying Homes In Europe

France Luxury Homes for sale - What $1 Million Buys In Homes Around The World

What $1 Million Buys In Homes Around The World

There was a time when $1 million could buy an urban penthouse, a waterfront villa, even a mountain chalet.

But those days are a thing of the past, according to Liam Bailey, head of residential research for worldwide property adviser Knight Frank. "One million dollars doesn't buy very much in the most desirable global property locations," he says.

Translation: Good luck finding four bedrooms, never mind a waterfront locale, for $1 million--at least in today's highly desirable markets like Paris, London and New York.

In the latter, says Elizabeth Stribling, president of Manhattan-based real estate brokerage Stribling & Associates, "Generally speaking, you're spending $1 million for a prime, one-bedroom apartment."

And despite bloated inventory typical of a sluggish market, those set on living downtown, but looking for a $1 million two-bedroom will need to travel north to the far corners of the less-hip Upper East or West Sides, she says.

Little changes when you look at similarly established markets overseas, says Bailey. Among them: London, Tokyo and Paris, where, for the most part, $1 million buys only 328, 522 and 594 square feet respectively, according to the firm's calculations.

"Not only has time marched on in real estate markets, but the position of the U.S. dollar as the world currency has weakened significantly against the Sterling and Euro as well," says Ian Payne, senior vice president and managing director for Europe, Middle East, Africa and Asia Pacific for Realogy global relocation firm Cartus. To put that into perspective, the purchasing power of $1 million is nearly a quarter less in the U.K. today than it was five years ago, he says.

"So in London, depending on where you are, that might buy you a very nice three-bedroom apartment or it might buy you a one-bedroom apartment,” he says, “but it no longer gets you anything wildly impressive."

Newer to the list of increasingly expensive locales are emerging markets like New Delhi and Dubai, which have seen property values soar in recent years.

But fortunately for those without a multitude of zeros to spend on a home, the dollar--or one million--can go much further if you're willing to look further afield.

In the U.S., George Ballantyne, vice president of Sotheby's International Realty, points to areas in the Midwest, such as Michigan and Ohio. "Once you get away from the two coasts and away from the sort of resort markets," he says, "$1 million will still buy an absolutely extraordinary property."

Eleanor Farnsworth, a luxury agent with Prudential Gardner, lets New Orleans serve as an example. Despite the devastation from Hurricane Katrina, she says many areas have remained largely intact--think the high-end areas of the University and garden districts--and thus in demand. In fact, $1 million can still get you a nice four- or five-bedroom home in a good location, she says.

And across the ocean, space is still to be had for a reasonable sum in and around Eastern Europe, despite the region’s increasing popularity, says Jamie Liddell, chief foreign correspondent for London-based Homes Overseas Magazine.

"The rise of Eastern Europe--the band from the Baltic nations all the way down to the Balkans--has been the major story of the last five years," he says. "But if you were to take $1 million to Central Warsaw, Central Prague or Budapest, you'd be still be looking at a five-, six-bedroom house out in the pleasant suburbs or a penthouse suite overlooking the river."

In fact, there are even picturesque areas of France, such as Burgundy, Champagne and the Bordeaux regions, where $1 million gets some pretty stellar property. "Here, you can still buy a grand, historic manor house, or even a small château, for around $ 1 million," says Alexander V.G. Kraft, chief executive of Sotheby's International Realty France.

He adds, "Depending on the market and the type of property you are looking for, [you] can still get ‘a million dollar property’ that actually looks the part."

Source Reference: One Million Dollar Property

How to Buy International Properties

Wish you could live on vacation, whether in the heart of Paris or on the beaches of the Caribbean? You can, if you play your real estate cards right.

Buy real estate abroad, and you get more than a charming escape and bragging rights to your villa in the south of France.

"Beyond the obvious status symbol, it is definitely the best way to embrace a culture and enjoy the art-de-vivre of [another] country," says Thierry Journiac, founder of Switzerland-based TerraCognita Estate Solutions.

You can add to the list of potential benefits a diversified portfolio, better value than you might find in the U.S., strong appreciation and perhaps some rental income.

That partly explains why a growing number of people have opened their minds--and their wallets--to foreign home ownership. In the last couple of years, the international real estate market has seen a significant boost from affluent buyers, whether they are after an idyllic getaway, a lucrative investment or both.

The economic climate at home has encouraged the international trend--and even with that climate changing, some experts see the buying abroad trend continuing.

Historically low interest rates, particularly in 2003 and 2004, encouraged real estate purchases, says Delores Conway, director of the Casden Real Estate Economics Forecast at the USC Lusk Center for Real Estate. Although rates have risen recently, she points out that they are still relatively low. "Another thing is the huge runup in the American housing market, enabling people to pull equity out of their own homes in order to afford a down payment on a second home."

That equity is less available with price growth in the United States slowing dramatically--and in some cases, declining. The investor population is obviously going to look for other places to put money, says Jim Gillespie, president and chief executive of Parsippany, N.J.-based Coldwell Banker Real Estate. And wealthy types looking to buy a second or third home have said that rising interest rates have no bearing on their purchasing decisions, he says.

According to Ian Payne, senior vice president and managing director for Europe, Middle East, Africa and Asia Pacific for Realogy global relocation firm Cartus, buying real estate in emerging markets can be very rewarding. Take Thailand, which offers beautiful scenery and has seen tremendous growth.

"People were going in there and making a complete mint," he says.

What's more, buyers can often get much more for their money--be it for a home or basic living costs--in many international locales.

"In comparison with U.S. prices, most European markets are quite affordable," explains Alexander V.G. Kraft, chief executive of Sotheby's International Realty France. "Where as $1 million doesn't buy you much in the U.S., in most European countries you can still find a grand home with lots of land. That's definitely a big incentive."

Of course, with the positives come the negatives--or at least the potential for negatives, if buyers aren't prepared. Among the risks is that a currency will slide, taking with it the value of your investment, or even political unrest. Concerns over property rights, local laws and cultural clashes should be factored into the decision making process as well.

"For some people, buying abroad is achieving a lifelong dream," explains Conway. "For these people it makes sense because in spite of the negatives, it is a lifestyle choice. They're quite willing to face those challenges--and probably even welcome them."

But people, who expect things to go as smoothly as they do in the U.S., may be in for an unpleasant surprise. Assuming both the process and the conventions will be the same as they are at home is one of the biggest problems foreign buyers run into, Payne says.

"There is a huge amount of naïveté from people thinking the system would be the same as theirs," he explains. "The assumption should be that it will be very different than your own."

If buyers fail to do this, they will become very frustrated very quickly. In fact, simply shopping for property can present location-specific difficulties, Kraft says. Unlike in the United States, you may have to make many of the viewing arrangements on your own. That could entail running from one agency to another to see a handful of properties, he says.

The property buying process (an exchange of letters can solidify a purchase in some locales) as well as the laws (foreigners cannot legally own property in certain areas) and restrictions (local laws deem certain materials or additions off limits) are often very local as well.

That's why our experts advise potential buyers to become very familiar with the area, as well as with the legal, financial and taxation implications of owning there, before entering any kind of binding decision. In order to do so thoroughly and adequately, they suggest enlisting the help of an independent attorney who has knowledge of the local laws and conventions.

The good news, you can do much of your homework without ever setting foot on a plane--and it is not only cost-effective but also wise to do so. Don't buy on impulse, when you're buoyed by tropical cocktails and beautiful sunsets. Look into everything from the stability of the currency to the growth potential of the property market.

"You should go with an open mind. Italy is Italy and France in France," Kraft says. "And none of them are California."

Source Reference: How to buy international Properties?