Homebuyers from the United States are being drawn to the property markets in Europe thanks to a currency advantage and amassed savings during the pandemic, analysis from real estate consultancy Knight Frank shows.
The US dollar is currently at 0.83 against the pound and at 0.99 against the euro, the latter of which represents a 16% discount since July 2021.
Data from Oxford Economics also shows US households accumulated $3.7 trillion in extra savings during the Covid-19 crisis. Stimulus payments, rising stock markets and fewer spending choices led to a massive savings boom. This has put a second home in reach of more US households, not just retirees and the wealthy.
Mark Harvey, Knight Frank’s head of international, said: “In the past US interest has been focused on cities offering culture and connectivity from Rome to Paris and from Barcelona to Florence but we’re now seeing US buyers target traditional sunbelt areas which is a departure from the norm.”
Knight Frank found that searches for French properties by US-based buyers via Knight Frank’s website were up 37% in the first five months of 2022 compared to the same period in 2021.
Paris, Venice and Tuscany are attracting a higher volume of US interest but so too are Mallorca, Sardinia and the South of France.
Knight Frank said the Federal Reserve is expected to raise rates by 75bps this week and the ECB’s next decision not until 8 September the dollar may yet strengthen further.
In 12 June 2022 the Center for Disease Control (CDC) in the US announced that air passengers travelling to the United States from a foreign country no longer required a negative Covid-19 test or documentation of recovery from Covid-19 before boarding a flight.