In light of stumbling progress in the Eurozone, many currencies have strengthened against the Euro, thereby creating stronger buying power in Europe. Sterling has emerged stronger, seen as a safer bet than the Euro and indeed strengthened considerably against other non-Eurozone currencies
At around 2.9 Turkish Lira to the pound, the buying power of the British property investor has strengthened by around 20% since last year Summer. This makes buying property in Turkey even cheaper, which already represents great value-for-money. It is possible to buy a lovely 3 bed villa by the sea for not much more than £100,000, or a 2 bed apartment by the sea for just over £50,000.
Sterling has strengthened against the Polish Zloty. It has recovered a lot of ground and is back to over 5 Polish Zloty to the pound, up by more than 25% on say 12-18 months ago. This means property in Poland can be 25% or more, cheaper.
But beware of taking too many risks or exposing your mortgage. Other countries in Europe haven’t fared so well. For example , Hungary has been hit by high levels of mortgage debt in foreign currencies. Many overseas buyers preferred the lower Swiss Franc mortgage rates (as opposed to the Forint) and opted for these, at the time of purchase. According to Hungary’s Financial Supervisory Authority, about 70 per cent of all bank loans are denominated in currencies other than the forint and 95 per cent of that is in Swiss francs.
This is a problem because the cost of foreign loans went up when the global financial crisis hit, as local currencies depreciated against the Swiss Franc, at a time when the value of property has declined in some of these markets.
There are many options for financing the purchase of a property, including buying in Swiss Francs. The reason this has been popular in the past is that the interest rate has been significantly lower than for other currency-denominated mortgages. However with the past few years’ global economic uncertainty and fluctuating exchange rates as well as interest rates, this is not always the best option. The cost of foreign loans went up when the global financial crisis hit, as local currencies depreciated against the Swiss Franc.
The good news is that European property has never been such great value for money, with property prices historically low and currency fluctuations in favour of sterling, now is a great time to buy European property.
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Property Venture® is an award-winning, UK-based agency for overseas property who helps people buy investment property and holiday homes in Europe, more easily and safely than they can on their own, because we offer grounded common-sense advice.
The focus is mainly greater Europe: Poland property, UK investments, Spain property, Turkey property, Cyprus property
On the Advisory Board and a Member of the Association of International Property Professionals (AIPP) the business has been vetted, approved and voluntarily commits to Industry Regulation and the Professional Code of Conduct. We are known for our quality customer service and non-pressurised approach to sales. Take a look at what our clients say
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Tags: Euro, European property, Exchange rate, Foreign Property, Forex, International finance, Mortgage loan, Overseas finance, overseas property agent