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Buying a second residence is becoming increasingly popular amongst Europeans, according to The Royal Institution of Chartered Surveyors’ (RICS) European Housing Review. More people are purchasing second homes, either in their own country, or abroad.

These homes may be rented out, but are generally used by one family and directly owned. Most second homes are acquired for leisure purposes. The investment aspect is important since significant proportions of household assets are tied up in them. In countries with a high proportion of rental property like France, Germany and the Netherlands, it is not unusual for people to rent their primary home but own their second. Owning another residence gives people living in dense, urban areas access to a more spacious environment, often by the sea where there is a more moderate climate.

Since the UK has a moderate climate, expensive housing and many urban dwellings with gardens, it has traditionally ranked relatively low on Europe’s second home league. The second homes market has long influenced planning and design in the primary housing markets of many European countries.

The fortunes of second homes and retirement markets are closely entwined as those looking to retire are attracted to the same places as those seeking a second residence for weekends and holidays. Holiday homes such as those in the Spanish coast, can be lucrative investment opportunities, providing a combination of capital growth with rental income.

The proportion of second homes across the EU varies considerably, with some of the highest concentration located in Southern European countries because of both the high local demand and their attraction as classic holiday destinations. In countries such as Greece, Italy, France and Spain, between 10 and 15% of housing stock is comprised of second homes.

Although Southern Europe is better known for its second homes, there is also a high proportion of second residences in Northern Europe because of the number of affluent countries in the region.

The past five years has seen a particular boom in second homes in many countries, although this is now coming to an end. The second homes market is at a greater risk of a crash than the primary homes market, since they are the first thing to be disposed of when people need to economise.

However, an imminent crash is unlikely.

According to Michael Ball, author of the European Housing Review: ‘Europe has had some of the liveliest second homes markets over the past five years, but if people are looking for a second home as an investment rather than a holiday home, it is probably too late to expect good returns as the market is currently at its peak.

‘The trend for second homes is likely to grow in the long-term because of cheap flights and lower living costs abroad.’

More information on the European housing market is available at RICS

Almost three-quarters (72.2%) of young Brits are considering moving abroad at some point, with over one in ten (12.3%) contemplating making the move within the next five years according to data released by the Fresh Start Show (13 to 15 May 2005 at London’s ExCeL Centre).

These findings support figures from the Office of National Statistics which show that emigration has reached its highest ever level, with 190,900 Brits leaving the UK to live abroad in 2003

Moving down under

According to the Fresh Start survey, the most popular destination for young professionals considering emigration is Australia, chosen by almost a third (32.1%) of respondents, followed by France (15.5%), America (11.9%) and New Zealand (10.7%).

Best of British

However, despite the willingness of young Britons to consider leaving their country, there are many things they would miss. Top of the list is family and friends, followed by pubs and the countryside. Men and women then differ in their priorities, with men rating British sport as important whilst women would miss the UK shops more.

The weather would be the least-missed aspect of the UK for both male and female emigrants.

Jet-set jobs

Money and work are the top motivators for leaving the UK, with over half (58.1%) of those who answered the survey admitting they would be encouraged to move abroad if offered a job transfer. Almost one in five (19.8%) would start packing if they came into a large sum of money with the lower cost of living overseas an attraction for almost one in ten (8.1%).

Cost is also enough to put people off moving, specifically the cost of moving and fears of higher living expenses overseas. However the biggest deterrent is not knowing a foreign language.

Nick Clark, managing director of Homebuyer Events said: “These statistics show the extent to which other countries are becoming more accessible with increasing numbers of people seriously considering moving abroad.”

“More and more people are realising that their dream of life on sunnier shores is not only achievable, but a viable option in terms of living costs, property prices and quality of life.”

The Fresh Start Show will provide expert information and advice for anyone considering living, working or investing abroad. Held at the ExCeL Centre in London’s Docklands from 13 to 15 May, over 100 exhibitors and a full seminar programme will include the New Zealand, Australian and Canadian immigration services as well as specialists in overseas property, money transfers, removals and others, covering emigration to Europe and the rest of the world.

Source: in2perspective

CROATIA is the new Courtown for the increasingly affluent Irish holidaymaker and investor. As property prices continue to rise at home, foreign shores look increasingly attractive and offer greater value. At the same time, agents keen to get a cut of the action are employing more sophisticated marketing techniques. Investment shows and overseas buying trips are now the norm as agents scramble to capitalise on the boom.

Estate agents estimate that more than 60,000 Irish people have purchased in excess of €6 billion of residential property abroad since the mid-1990s. Two-thirds of that amount is believed to be invested in Spain alone. Figures recently released by the Central Statistics Office indicate that Irish investors spent in the region of €250m acquiring overseas residential property in the first quarter of 2004, although that figure excludes UK investment and purchases financed by foreign banks.

“In a few years’ time, having an overseas property will be as common as having a DVD player. Pretty much everyone will own one,”

said Maura Byrne, the managing director of Azur Assistance Ireland, an overseas property consultancy. That may be an overstatement but there is no arguing with Byrne’s claim that the overseas market is extremely buoyant and will continue to grow.

“Buying a second home in Ireland has become too expensive for most people,”

she added. A recent survey carried out at a property exhibition confirmed the scale of intentions when it came to purchasing overseas. The majority of respondents planned to spend up to €200,000 and the favoured locations were Spain, France, Portugal, Bulgaria, Hungary, the Czech Republic and Croatia.

Selling overseas property to Irish investors used to be so easy that few developers had to look beyond the tried-and-trusted method of flogging their wares off the plans from a rented hotel room. The recent proliferation of competitors has forced the industry to rethink its marketing approach.

The most obvious marketing trend at the moment is the abundance of large-scale exhibitions happening all over the place,”

said Byrne, whose company specialises in selling property located in “old Europe”, especially France.

“The number of these shows has dramatically increased.”

Over the Easter weekend RTE’s House Hunters in the Sun exhibition will open at the RDS Simmonscourt. Destinations featured include Spain, Portugal, Italy, Bulgaria, Greece, France, Dubai and the Bahamas. There will be 22 different 30-minute seminars with property, law and tax experts held each day.

Last month 3,000 would-be investors headed for Dublin’s Citywest hotel for the Investment Property exhibition, organised by SDL Exhibitions. The show attracted agencies offering properties in more than 30 countries.

Not all overseas property companies are enamoured with this marketing approach. Finbarr Callaly, a director of France Residence, which specialises in residential properties for well-heeled investors, said: “They are like bazaars and they flood the attendees with too much information.

“There is quite a lot of mis-selling. Some of the companies at these shows would sell you anything and, in the long term, this creates problems. It’s not like people are buying a tin of beans.”

Callaly said that from a cost perspective, large exhibitions are not worth it for his company’s specialised market. “The big exhibitions just lump everyone in together.”

The Viva Espana property exhibition held at the RDS last November which described itself as ‘a property and lifestyle show’ – was, according to some exhibitors, a disappointing affair that failed to attract big numbers. Many commentators said it was an indication that the Spanish market is on the wane at the expense of eastern Europe.

A growing number of companies are now holding their own private shows in order to avoid the confusion of the large events. “We find that private shows work best for our company. We’ve been doing them for four or five years now and we’ll be doing many more in future,” said Byrne.

Callaly’s France Residence also conducts several private shows each year. “These would feature an exclusive product. Typically, we have a seminar in a hotel, sometimes combined with the launch of a new development,” he said.

The company supports its private shows with targeted direct mail shots and also relies heavily on its website.

“People are more knowledgeable than before. Many people will often have specific questions when they come to you. They will usually have done extensive online research beforehand,”

said Callaly. He says that 30% of the people who attend their private shows are repeat clients or referrals from existing clients.

The company also attracts syndicates of professional investors. “For those, we market differently. You wouldn’t see the properties displayed on the website,” he said.Noreen Hynes, the managing director of Aquarius Properties, which markets homes in Spain, Portugal, Italy, eastern Europe and America, said:

“People nowadays want more information. They will have done some research and when they come to you they want professionalism and integrity. They don’t want bull and misinformation.”

Hynes stressed the importance of relationship marketing when selling overseas property.

“Face to face is the only way to communicate. Clients will want to build a relationship with you in case they want to buy again at a later stage.”

She predicts that, in the future, people will be able to ring up their “friendly, local property adviser’ in much the same way as they would currently ring their stockbroker. “They will be able to say, “I have €50,000 to invest. What have you got for me? Aquarius advertises its properties in newspapers and on the radio.

“We find this effective because it gets people to look at our website. The site is really important to our business. We’ve had it up and running from day one,”

said Hynes. In addition to the usual selection of property profiles and a drive to get viewers to sign up for a monthly newsletter, the site also offers potential buyers the chance to book subsidised viewing trips abroad. “Viewing trips have always been around, but the days have gone when you could just send a bus load of people to look at different properties,” she said.

“Investors want to be made to feel special. We make individual arrangements for people and they will be met abroad by an agent who will they know exactly what they want.”

France Residence will only organise a viewing trip if the client requests to be flown out to see a particular property. “I think that subsidised viewing trips are a cynical sales device. We prefer no-pressure sales,” said Callaly.

Hynes said: “Clients are not fools. To treat them as such would be wrong. You have to work with them.”

Callaly again warned against overagressive marketing techniques. “It will be interesting to see people’s reactions if the big promises made about the emerging markets such as eastern Europe fail to materialise,” said Callaly. “If the returns aren’t there, they may recoil back to traditional markets.”

“Some brokers sell the property instead of the investment, but we believe that we are marketing a financial product, and not just a piece of property.”

- From the Sunday Times