American Buyers Set Their Sights on Europe
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American Buyers Set Their Sights on Europe

Second-home markets in Europe have seen an uptick in interest from Americans.

By J.S Marcus
Thu, Jul 15, 2021 10:46amGrey Clock 5 min

Kathryn Gamble, a Chicago veterinarian, and her husband, Texas orchestra conductor Robert Carter Austin, have been frequent visitors to Venice for more than two decades, staying in hotels or short-term rentals. They were ready to buy a home there in 2020, but Covid-19 intervened.

Now, as trans-Atlantic travel for Americans tentatively resumes, they are restarting their search.

During the couple’s most recent Venetian sojourn in 2018, they rented a palazzo on the Grand Canal, recalls Dr. Gamble. They hosted friends and family, and flew a Texas flag from the balcony. Looking ahead to ownership, they hope to recapture some of that atmosphere.

“We need to be on the water,” says the 54-year-old. “And we need to have three or four bedrooms. It’s Venice, and people will come to visit.”

Dr. Gamble and her husband, 75, recently made inquiries about a nine-bedroom, 17th-century Grand Canal palazzo listed for $11.2 million, according to Knight Frank, which is handling the sale. On the other side of the canal, a six-bedroom, 3,800-square-foot apartment in an early-20th-century building is listed for $2.7 million.

From Lisbon to the Greek islands, the Americans are back, ready to take advantage of the buyer’s market in many of Europe’s leading resort areas. There are bargains to be had at the entry and mid-levels, with prices buoyant at the top end.

In mid-June, the European Union reopened nonessential travel from the U.S., prompting a jump in property inquires, says Mark Knight, a London-based partner and head of international residential sales at the U.K.’s Knight Frank. He says the latest wave of house-hunters are especially interested in vacation homes in Italy and France, and he also has seen more calls about Lisbon. At Savills, another U.K. real-estate company, inquiries from Americans have doubled compared with this time last year, says Hugo Thistlethwayte, head of global residential operations.

Knight Frank last week released its Global Residential Cities Index for the first quarter of 2021, giving a view of price changes from the year-earlier period, when lockdowns began to take hold worldwide. It shows double-digit increases clustered in the Nordic countries and Eastern Europe, while prime European second-home destinations that had been inching toward the top in previous years—including Lisbon and Malaga on Spain’s Costa del Sol—are seeing declines.

In Venice, real-estate prices are down by 4.3% over the past year, Knight Frank shows. “It’s not like it was before,” says Giovanni Rubin de Cervin Albrizzi, a local architect. “But recently, there have been lots of French and Germans, and the Americans are starting to come just now.”

Mr. Rubin, who specializes in renovations of historic properties, says the pandemic changed his business. Instead of full-scale renovations of second homes, he is doing more partial projects on long-term rentals, where such work is done by renters in exchange for discounts.

Jeffrey Alexopulos, another Texan, is looking in Marbella. Overall prices in the Spanish coastal resort fell 10.3% from spring 2020 to 2021, says Andrea de la Hoz, senior analyst at Tinsa, a Spanish real-estate consultancy. Mr. Alexopulos says his interest was piqued by a three-bedroom Marbella apartment listed at $515,000, down from the $770,000 the owner had paid a few years ago. He attributes the fall to the drop in vacation rentals.

At the luxury end, however, purchases have surged to a level not seen before, says Christopher Clover of Panorama Properties.

He currently is selling a five bedroom, 13,364-square-foot villa in La Zagaleta, a gated Marbella-area mountain development, for $19.9 million. Earlier, a 33,500-square-foot villa on 3.4 acres in the same development, listed for $37.9 million, sold after two years on the market.

Americans, known for favoring traditional properties, are now are in line in Marbella with international preferences toward new construction, says Mr. Clover.

Mr. Alexopulos, 68, and his wife, Janet Ferrari, 55, who co-own backyard-game manufacturer Free Donkey Sports, say they see Europe as offering a better return on a second home for themselves and their London-based son. “The prices in the U.S. are crazy right now,” says Mr. Alexopulos. They recently sold an Orlando, Fla., property they owned.

Americans typically play a niche role in Southern Europe’s luxury second-home markets, which tend to be dominated by sun-hungry Northern Europeans. But they have traditionally made themselves more conspicuous at the very top of those markets.

A Knight Frank study on French markets shows Riviera prices are static at 1% increase during 2020, but they still are the country’s highest. Saint-Jean-Cap-Ferrat, a tiny peninsula near Nice, has the country’s most expensive real estate at $3,855 a square foot.

In search of quieter or more authentic options, American looking in the area seem most interested in the so-called backcountry listings, such as a six-bedroom stone farmhouse, dating to the 18th century, a 40-minute drive from Antibes. The 2.2-acre property has an asking price of $7.4 million.

Americans should expect evolving rules for travel and viewings across Europe. Mr. Alexopulos says he and his wife—both fully vaccinated—are preparing for their trip by monitoring U.S. State Department information on Spain, as well as the Spanish health website. They also stay in touch with their airline.

In Lisbon, now a major tourist destination and second-home market, prices fell 3.8% from the first quarter of 2020 to the 2021 period, according to Knight Frank.

Newer arrivals include those in Lisbon’s growing high-tech scene, says Lindsey Elkin, co-founder of Yayem, a members club and digital platform based in greater Lisbon. Ms. Elkin, 31, a Philadelphia native, says American tech-industry expats are looking for homes in Lapa and Santos, historic districts with river views.

Vitor Almeida, a Portuguese architect with a high-end residential practice that caters to expatriates, says the pandemic brought delays to renovations but no added expenses. Last year, he completed a $1.1 million renovation of a 3,500-square-foot unit in Lisbon for Cinara Ruiz, a Brazilian entrepreneur who divides her time between Portugal and Brazil. Work included restoring the apartment’s original frescoes and adding two full baths and three half-baths to what had once been a one-bathroom home for a single family. Mrs. Ruiz, 53, bought the property for $3 million in 2019.

Americans also are showing renewed interest in Greece, one of the first European countries to welcome them back this year. According to Greece Sotheby’s International Realty, U.S. inquiries were up by 60% this spring, compared with spring 2020. Francis Michael Prantounas, sales director of Engel & Völkers Greece, says luxury prices are strong on the islands of Santorini and Mykonos, and bargains are found on Paros, an island south of Mykonos.

Prices in Mykonos—which has gone from a hippie redoubt to a gay mecca to an exclusive vacation enclave—have jumped nearly 5% over last year, says an analysis from Engel & Völkers.

Vana Verouti, a 70-year-old Greek singer and interior designer, bought an empty lot on the island’s southeast tip in 1995 and built a 3,800-square-foot villa with her now-deceased husband. Ms. Verouti—who divides her time between Athens, Mykonos and a home in Switzerland—has put her 1.7-acre property on the market for $3.1 million.

Mykonos competes with the island of Corfu for Greece’s most expensive vacation homes, says Savvas Savvaidis, of Greece Sotheby’s International Realty. He says Americans make up about 10% of Greece’s luxury market. Mykonos’s most expensive properties, he adds, tend to be on the west side, to take advantage of dramatic sunsets and easy access to Mykonos Town, as the island’s largest settlement is known.



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Hong Kong Takes Drastic Action to Avert Property Slump

The city’s real-estate market has been hurt by high interest rates and mainland China’s economic slowdown

By ELAINE YU
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Hong Kong has taken a bold step to ease a real-estate slump, scrapping a series of property taxes in an effort to turn around a market that is often seen as a proxy for the city’s beleaguered economy.

The government has removed longstanding property taxes that were imposed on nonpermanent residents, those buying a second home, or people reselling a property within two years after buying, Financial Secretary Paul Chan said in his annual budget speech on Wednesday.

The move is an attempt to revive a property market that is still one of the most expensive in the world, but that has been badly shaken by social unrest, the fallout of the government’s strict approach to containing Covid-19 and the slowdown of China’s economy . Hong Kong’s high interest rates, which track U.S. rates due to its currency peg,  have increased the pressure .

The decision to ease the tax burden could encourage more buying from people in mainland China, who have been a driving force in Hong Kong’s property market for years. Chinese tycoons, squeezed by problems at home, have  in some cases become forced sellers  of Hong Kong real estate—dealing major damage to the luxury segment.

Hong Kong’s super luxury homes  have lost more than a quarter of their value  since the middle of 2022.

The additional taxes were introduced in a series of announcements starting in 2010, when the government was focused on cooling down soaring home prices that had made Hong Kong one of the world’s least affordable property markets. They are all in the form of stamp duty, a tax imposed on property sales.

“The relevant measures are no longer necessary amidst the current economic and market conditions,” Chan said.

The tax cuts will lead to more buying and support prices in the coming months, said Eddie Kwok, senior director of valuation and advisory services at CBRE Hong Kong, a property consultant. But in the longer term, the market will remain sensitive to the level of interest rates and developers may still need to lower their prices to attract demand thanks to a stockpile of new homes, he said.

Hong Kong’s authorities had already relaxed rules last year to help revive the market, allowing home buyers to pay less upfront when buying certain properties, and cutting by half the taxes for those buying a second property and for home purchases by foreigners. By the end of 2023, the price index for private homes reached a seven-year low, according to Hong Kong’s Rating and Valuation Department.

The city’s monetary authority relaxed mortgage rules further on Wednesday, allowing potential buyers to borrow more for homes valued at around $4 million.

The shares of Hong Kong’s property developers jumped after the announcement, defying a selloff in the wider market. New World Development , Sun Hung Kai Properties and Henderson Land Development were higher in afternoon trading, clawing back some of their losses from a slide in their stock prices this year.

The city’s budget deficit will widen to about $13 billion in the coming fiscal year, which starts on April 1. That is larger than expected, Chan said. Revenues from land sales and leases, an important source of government income, will fall to about $2.5 billion, about $8.4 billion lower than the original estimate and far lower than the previous year, according to Chan.

The sweeping property measures are part of broader plans by Hong Kong’s government to prop up the city amid competition from Singapore and elsewhere. Stringent pandemic controls and anxieties about Beijing’s political crackdown led to  an exodus of local residents and foreigners  from the Asian financial centre.

But tens of thousands of Chinese nationals have arrived in the past year, the result of Hong Kong  rolling out new visa rules aimed at luring talent in 2022.

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