Buying or Selling ‘International’ property
by Lucia Fairweather – Staff Writer
The ease of buying or selling real estate varies enormously depending on where in the world you happen to live. Many people expect the wheels of bureaucracy to turn differently between countries, with greenbacks sometimes providing the grease to help them spin more freely, but there are other important aspects to consider as well.
More people than ever before are buying property overseas as second homes, driven by the lure of cheaper land prices, better weather and simpler lifestyles.
driven by the lure of cheaper land prices, better weather and simpler lifestyles
While the number of potential buyers continue to increase, so too are new real estate opportunities and the number of existing properties for sale. This situation happily leads to greater choice for those looking to buy but unfortunately for those wanting to sell, it can mean increased competition.
It’s not all wine and roses for the buyers though. As every tardy guest can testify, the later one arrives at a party, the more likely the choicest tidbits will be gone. Additionally, for home buyers, as inflationary pressures mount, and the desirability of a location increases, so inevitably does the price of the properties for sale.
as inflationary pressures mount and the desirability of a location increase, so inevitably does the price
Another important factor impacting the price and saleability of a property is its comparison with other similar properties. For international property, this comparison is not just between properties in the immediate locale but worldwide. Beachfront property for example, is likely to be compared against beachfront in any country where it exists. If the price of a particular type of real estate in one country rises too far in excess of that in another comparable country, the real estate market in the price-inflated country can slow considerably, as buyer-interest moves elsewhere.
Another aspect for sellers to consider is the disproportionate price inflation of certain types of real estate to the local property market. This can occur when particular types of property, e.g Beachfront, Riverfront attracts the attention of foreign buyers. As the price increases, local buyers look elsewhere, leaving the most likely subsequent buyer of the property to be a cash-rich foreigner – and thereby perpetuating the trend.
When a domestic market provides the bulk of new buyers, a ‘for sale‘ yard sign and a listing in the local Realtor’s office may be all that’s required to make a sale. When the likely buyer can come from anywhere in the world, a very different strategy is required; one which incorporates a proactive global approach.
When the likely buyer can come from anywhere in the world, a very different strategy is required; one which incorporates a proactive global approach
A buoyant property market occurs when there is a limited supply of desirable real estate and an oversupply of willing purchasers. If either side of the equation becomes imbalanced, the effects can cause problems for all concerned.
A buoyant property market occurs when there is a limited supply of desirable real estate and an oversupply of willing purchasers
This equation is especially important if one is buying property primarily as an investment. Here a timely resale can be as important as healthy capital growth, as trends can change fast in international real estate. Certainly, when selling property in a non-first world country it’s better to allow a more generous timescale than usual to achieve a sale and whenever possible, avoid the need to liquidate quickly.
when selling property in a non-first world country it’s better to allow a more generous timescale
International property is prone to the vagaries of fashion and circumstance. One Hollywood blockbuster positively featuring a country as a destination, can cause a substantial spike in not only its popularity – but its real estate prices. Conversely, a natural disaster or the onset of political instability can make it infinitely more difficult to achieve a sale in the short to medium term.
The risks and rewards of buying international property will almost always be higher than staying within the confines of a familiar home market. However, for many, life is for living and living in your dream home in paradise can be the reward that makes the risk worthwhile.
… living in your dream home in paradise can be the reward that makes the risk worthwhile
