For thousands of Americans, there is no place like (a luxury second home) (in Europe).
As the value of the euro collapsesAmerican buyers are flocking to Europe in search of property.
According to real estate firm Knight Frank, searches for French properties by US-based buyers jumped 37% in the first five months of 2022 compared to the same period last year.
Cities across Europe are experiencing “the same trend,” writes Kate Everett-Allen, Residential Research Partner at Knight Frank.
“The devotees of Paris, Venice and Tuscany attract a greater volume of American interest, but are also MajorcaSardinia and the south of France,” she says.
Other parts of the continent are seeing a similar trend.
According to the Portuguese Immigration and Border Services, the number of Americans living in the country has doubled from 3,300 in 2018 to 6,900 in 2021. Under the Portuguese “Golden Visa” program, Americans who buying a property in Portugal only need to spend seven days a year. in the country to obtain citizenship after five years.
Greece is another popular destination. Applications from Americans wanting to move there rose 40% in April-June this year compared to 2021, according to Sotheby’s International Realty.
US citizens are flocking to urban and rural areas, says Mark Harvey, Frank Knight Responsible for Internationals.
“In the past, US interest has focused on cities offering culture and connectivity from Rome to Paris and from Barcelona to Florence. But we are now seeing US buyers targeting traditional Sunbelt areas, which is a departure from the norm.
Why are Americans moving to Europe?
The most important factor pushing American buyers to Europe is the fall in the value of the Euro.
In July, the European currency fell below the value of the US dollar for the first time in 20 years.
The precipitous decline is partly a consequence of the war in the Ukraine and the looming threat of a recession.
The US dollar, on the other hand, has remained relatively strong, partly thanks to rising interest rates and partly thanks to its reputation as a “safe haven” in turbulent times.
“With the Fed tightening monetary policy more aggressively than the eurozone to fight above-target inflation, the dollar appreciates against the euro,” Everett-Allen writes.
As currency values change, purchasing power also changes. Americans can get more get their money’s worth in Europe than before. Europeans receive less in the United States than in previous years.
Are real estate prices increasing less rapidly in Europe?
The other important factor is the relative low real estate prices.
According to Knight Frank Global Residential Index, prices are rising rapidly in many parts of the United States.
Nine of the 20 cities with the fastest rising house prices are in the US. The first three, Phoenix, Miami and San Diego, saw prices increase by 29% or more.
By comparison, price increases are small in parts of Europe. In Paris and London, prices increased by less than 5% between the first quarter of 2021 and the first quarter of 2022. In Florence, prices fell by 1.6% during the same period.
Everett – describes the situation as a “godsend” for future American owners in Europe.
“Go elsewhere”: how Europeans react to American buyers
For many Americans, the opportunity to relocate is a dream come true. However, not everyone is happy with the influx of new buyers.
Social media is on and locals are complaining about the concomitant rise in property prices.
“Go somewhere elsewe have enough home shortages as it is,” Twitter user Kaloyan Doynov wrote.
“Only the rich can afford it, they drive up prices for all of us,” another user said.
In Barcelona – where house prices have risen 4.3% over the past 12 months – the anger against digital nomads turned into protests.
“Your luxury trip, my daily misery,” reads a slogan painted across town.