Global luxury real property trends for 2023: golden visas in Dubai, castles in Italy and more
Berkshire Hathaway HomeServices, a global real estate franchise network, released its first report about luxury real estate trends in Europe and Asia.
The trends shaping these markets in 2023 were provided by brokers based in Greece and Italy, Spain, Portugal.
Here are some highlights:
Golden Investor Visas encourage European real estate flight
In 2022, the Greek government announced that visas will require a minimum investment of 500,000 Euros to obtain. This includes popular destinations like Santorini, Mykonos, Athens and Mykonos.
The market is pricing out Greek citizens due to overseas investments, which are also impacting the vacation rental market. Kyriakos Xydis is the managing partner of BHHS Athens Properties and advised that visitors should schedule their vacation rentals at least six to nine months in advance due to growing demand.
BHHS also entered Italy in 2019 to serve clients in Milan, and last year, it expanded into the country with the entry of Rome as the capital.
Marcus Benussi, managing partner and office manager at BHHS MAGGI Property Agency, said that this is a good moment for overseas buyers to make investments in Italy and its coast properties. Foreign investors are not only being encouraged by the government, but also generational changes are putting legacy properties such as castles on the market.
This is partly because the younger generation is trying to avoid maintaining expensive and difficult generational real estate. According to the report, they prefer to rent smaller properties that are easier to manage.
Benussi stated that there are more castles or other special properties than apartments in Milan. He said that most incentives are geared towards newcomers at the moment.
Portugal’s real estate market is seeing renewed interest since January 2022, when new regulations for the golden Visa program were implemented.
Although residential real estate investments in high-density locations were limited, overseas buyers still have the option to purchase commercial properties in these areas as well as residential properties located in low-density regions.
The report stated that although Portugal’s Golden Visa requirements have changed in recent years, it is not slowing foreign investors’ interest and that the demand for property abroad is higher than ever.
CEO of BHHS Atlantic Portugal Cesar Santos says buyers are interested in areas such as Lisbon, Alentejo and Comporta over the past decade, shifting their attention from popular places like The Algarve, which were in high demand 20-30 years ago. High demand is also being shown for cities like Porto and Aveiro.
Spain is another hotspot for European real estate buyers, with 25% of all foreign buyers buying property in Spain, according to the report.
The golden visa program in Spain allows foreigners to invest real estate. Spanish banks are also experienced in offering mortgages to foreign buyers. They can offer loans up to 60% and take as little as 20 days to process. There is a shortage of inventory for luxury properties, a trend that began during the pandemic.
London saw a large exodus of “lifestyle buyers” in recent years. However, the trend reversed as people who moved out faced difficulties living in the country. They were also left behind by the “oversubscribed train services”, which was a result of offices opening up and requiring in-person meetings.
Although it was called a “mass departure” by the media, it was actually a small number of people who fled the city during the pandemic. Cliff Gardiner, head sales at Berkshire Hathaway London Kay & Co. and BHHS Marler and Marler, explained that it was actually a small group.
This resulted in a rise in prices in areas that had not experienced such highs in the past. Gardiner stated that buyers are reassured as London’s property market picks up. This is because prices are flat and the market “relatively calm.”
He stated that “the buyers are out there” in the report. “We’re just working harder than in previous year to get transactions over to the line.” He also expects that there will be a positive economic cycle as 2023 progresses.
What makes Asia attractive to foreign buyers?
According to the report, Indian buyers are interested in commercial investment. They want to invest in infrastructure, logistics improvements, and a growing economy.
Chief advisor, marketing and communications, Sanya Aeren, said that she has seen an increase in foreigners purchasing subcontinental real estate.
“This is India’s story. There is still so much to do, but this is the next frontier,” said Shrey Aeren of BHHS Orenda India.
Dubai is a popular tourist destination in the Middle East and a desirable region for expats as well as second-home buyers.
Phil Sheridan, CEO at BHHS Gulf Properties, said that tax benefits are one of the most sought-after incentives in the UAE. “Not a week passes without a U.S. realtor visiting Dubai, calling and asking about Dubai real estate.”
Sheridan explained that to apply for a Dubai investor visa, one must invest $200,000 A $540,000 investment could secure the visa. After that, the investor can work in Dubai and stay without the need for sponsorship.
The artificial islands archipelago Palm Jumeirah are a popular spot that attracts high-net-worth individuals, according to Sheridan. This has led to an increase in property prices over the past year.
BHHS currently has offices in 12 countries and four continents. It employs more than 50,000 professionals in the real estate industry and has nearly 1,600 offices. This represents more than $154.7 billion in total real estate sales volume.