New Yorkers dreaming of owning a villa in Italy, a Parisian pied-à-terre or a mountain retreat in the Canadian Rockies are in luck.
Real estate in Europe — along with Canada and the Caribbean — is on sale thanks to a strengthening US dollar and sluggish economies abroad.
And the favorable fiscal climate for Americans is translating into steep discounts on vacation homes everywhere from coastal Spain, France and Portugal to northern Italy and the sandy shores across the West Indies.
Even notoriously expensive Britain is getting into the act, thanks to the recent Brexit vote. The move could see prices decline thanks to a sinking British pound, contracting finance sector and slowdown in demand for prime UK properties.
Indeed, over the past week, the pound has sunk to its lowest level since 1985. Meanwhile, the euro isn’t faring much better. From a low point in 2014, the dollar has strengthened by 26 percent against the euro — the strongest levels since 2003. That means a home listed at 500,000 euros two years ago would have been worth about $685,871.
That same property today has a price tag of roughly $563,889, says Rupert Fawcett, partner at global real estate consultancy Knight Frank in London.
The US dollar is also soaring in Canada, where the Canadian dollar is down some 30 percent against the greenback since the end of 2011.
“The lower currency is obviously positive for Americans, and we’re seeing more of them coming back into this market,” says Hans Nieuwenhuis, manager of Canadian Rockies Realty.
He recently listed a one-bedroom ski-in/ski-out condo at Kicking Horse Mountain ski resort west of Calgary for just 195,000 Canadian dollars (US$150,000) which has just been reduced to $180,000. “The entire Canadian market is now much more appealing to Americans.”
Back in Europe, Marie-Hélène Lundgreen, a broker in Paris for Christie’s International Real Estate, says she has 20 percent to 25 percent more American clients than in 2014, with many hailing from New York.
She recently sold a triplex apartment in Paris’ posh seventh arrondissement to a New York client. The residence, priced at 4.6 million euros, or $5.1 million, included a landscaped terrace, double-height ceilings and a fireplace, Lundgreen says.
Property prices in Europe and other foreign locations, which fell 30 percent to 40 percent during the financial crisis, still haven’t fully recovered, says Ricardo Sousa, CEO of Century 21 Portugal. He estimates that the number of New York clients buying beachfront residences in Portugal has nearly doubled since 2014, buoyed mostly by the lower costs.
“The financial timing for Americans hasn’t been this good in a decade,” says Sousa, whose listings include homes in the capital, Lisbon, as well as coastal areas. “New York clients have especially realized this and are starting to take advantage.”
Josef Siegle is one of the New Yorkers cashing in. A rich cultural history and an abundance of natural beauty enticed him to vacation in Portugal in November. A soaring dollar and cheaper home prices were the main catalysts for buying there, he says.
Siegle, who lives in Midtown and runs a media licensing company, paid just 65,000 euros (about $75,000) in April for a five-room vacation home in the Azores, a pristine archipelago off the coast of Portugal. The 49-year-old plans to spend “another few thousand euro or so” renovating the place. The property includes unobstructed ocean views and easy access to hiking and biking trails.
“The location was really a big draw,” Siegle says. “But the strong dollar meant lower prices, so that really made it easier for me to buy.”
Sebastian Fischer, managing director at Engel & Völkers in Berlin, says the German capital has been flooded with buyers from New York over the past few years as the city’s profile as a hipster enclave expands and the rising dollar keeps prices relatively cheap. He’s handling sales at Studio House, a new condominium under construction in the trendy Prenzlauer Berg district.
Apartments include soaring beamed ceilings, rosewood flooring and sleek, German-made kitchen appliances. With prices ranging from just 106,000 euros to 247,000 euros ($117,000 to $274,000), Studio House isn’t just targeting Germans.
“These kinds of prices are made to appeal directly to Americans who now have more buying power in Europe,” says Fischer, who traveled to New York earlier this year to market the project to investors. “It quickly became clear to me on that trip that buyers in New York City felt the time was right to invest.”
NYC-based Liam Carroll says he watched real estate prices fluctuate overseas for years before buying an apartment in Berlin in March. “I’d see the dollar inch up, and realize the property I’m looking at is actually cheaper today than it was last month,” says the 60-year-old retired oil trader.
Carroll and his wife fell in love with Berlin’s gritty charm during a 2015 visit and decided to buy a place there. The couple paid about 4,200 euros per square meter (about $4,600) for a renovated prewar apartment measuring just over 100 square meters (about 1,000 square feet) in Mitte, a former East Berlin district dotted with trendy bars and cafes. “Timing is everything — in real estate and in life,” says Carroll, who intends to move to Berlin later this year. “The time was right for me.”
Of course, New Yorkers aren’t alone in investing overseas. The number of overall American buyers searching for homes abroad rose about 30 percent in 2015, according to Leading Real Estate Companies of the World. The numbers are based on inquiries received through its network of more than 500 real-estate firms.
Sally and Louis Cannon of Michigan have three kids living in Manhattan: a 29-year-old son working in private equity, a 27-year-old daughter in marketing and a 24-year-old son studying at New York University. Their location convinced the Cannons that it was time to buy in the British Virgin Islands. “All of [the kids] thought it was a good idea to buy a place where we could vacation together,” says Louis, a 58-year-old heart surgeon.
So the couple bought land at Oil Nut Bay, a Caribbean community of 88 total homes spread across 300 acres on the eastern tip of Virgin Gorda, the third-largest of the British Virgin Islands. Homes and lots range in price from $2.95 million to $50 million with sizes up to 50 acres, according to the developer, Victor International.
“We all love it down there, so it just made sense to invest in the Virgin Islands,” says Sally. The Cannons join a growing number of Americans returning to the Caribbean after sluggish years in the wake of the 2008 financial crisis.
James Burdess, head of the Caribbean desk at real estate agency Savills, estimates that property prices on some islands sank by 30 percent after the crisis and have yet to fully recover. “The falloff in prices actually helped fuel higher demand,” says Burdess, adding that islands like Barbados and the British Virgin Islands are seeing the most increase in activity.
“Americans have really been a very big part of the recovery in Caribbean property sales.”