Wealthy Buyers Look For Prime Property Investments As Hedge Against Uncertainty

Wealthy Buyers Look For Prime Property Investments As Hedge Against Uncertainty  

Absentee London Home Owners Look To Expanding Their Property Portfolios

London’s prime property market has traditionally been seen as a safe haven for wealthy investors domiciled in Asia, the Middle East and Eastern Europe but it now appears that these well-heeled individuals are also looking for property investments in other prime locations,including on the French Riviera, in Italy’s Tuscany and in Greece.

A hedging strategy

According to international property firm Beauchamp Estates, wealthy absentee London home owners, particularly from Eastern Europe, Asia and the Middle East, are targeting the high-end holiday markets in top locations around the world to acquire second and third homes. Such acquisitions are aimed at the assembly of relatively liquid assets and as a hedge against global uncertainty, the broker says in its latest International Market Insight report. These property investments also have an additional value, inasmuch as they can be rented out, allowing the investors to cover their costs and generate additional income, the firm says.

Beauchamp points out that trends in buying and letting holiday homes are highly correlated with the state of play in international tourism, an industry which has been growing in the past several years. According to estimates by the United Nations World Tourism Organisation (UNWTO), the total number of tourist arrivals in 2012 will prove to have reached one billion, up from the 935 million registeredin 2011. And with growing tourism comes a growing demand for holiday homes. According to the Beauchamp data, amongst the most preferred locations for such property investments are the French Riviera, Italy and the Greek Islands.

Southern France

The French Riviera has built a strong and enduring image with its world-renowned resorts, a cachet which sees the region attracting very high demand from international buyers. According to the region’s tourism committee (CRT), this demand drove a 15% increase in second home ownership on la Côte d’Azur, excluding Monaco, between 2003 and 2007. Currently there are over 71,000 foreign-owned second homes between St Tropez and Cap Martin.

The high-end holiday market is dominated by Russians and other CIS nationals, as well as buyers from the UK, France, Scandinavia and the Middle East. Strong international demand keeps prices in the Provence-Alpes-Côte d’Azur (PACA) region stable and elevated. On average, prices in the area are 82 percent higher than the national average, excluding Paris.

“Today however, we see the Côte d’Azur market continues to flourish,” says Beauchamp Estates’ report, pointing out that investor interest is highest in top locations offering high end services and prestigious lifestyle,meaning the likes of Cannes and Monaco, where the fiscal advantages - read, tax haven status - provide additional appeal to investors.

Tuscany

Tuscany, Italy’s third most visited region, continues to attract wealthy overseas buyers even amidst uncertain economic conditions which have seen the overall number of property transactions in Italy fall significantly year after year since 2006. Although Tuscan property prices are amongst the highest in the country, real estate in the province is more affordable than in other desired locations, such as Portofino, Porto Cervoand Capri. The same can be said ofthe region’s main city, Florence, which generates high prices but nevertheless trails well behind Rome, Milan, Venice and Naples.

Traditionally, the Tuscan holiday home market has been dominated by UK buyers but in the last five to eight years the province has started to attract a much more diverse foreign investment interest. Tuscany is proving very attractive to wealthy citizens of CIS countries, many of whomhave also made prime property investments in the London market.