With travel restrictions continuing to ease by the day, international buyers have returned to hunting for luxury property in many of the world’s most exclusive markets.
Chief Executive Officer of Berkshire Hathaway HomeServices, Christy Budnick said the ratio of international to domestic buyers would keep increasing over the course of the year.
“Once border restrictions were lifted, we quickly noticed many people wanted to travel freely and subsequently, move forward with transactions that they had been waiting to see through,” Ms Budnick said in the latest Global Luxury Landscape report.
“Some destinations that typically relied on overseas investors ground to a halt during the pandemic, but now they are booming and that is great for the travel, tourism and real estate industries.”
At the height of the pandemic, international investment in US real estate fell to a near record low of seven per cent according to Deloitte.
However, by 2021, buyers had started returning to the worldwide market with increases as high 41 per cent year-over-year in destinations like Spain.
Berkshire Hathaway HomeServices Broker Gregory Gunter said locations that were heavily focused on international travellers, such as Mexico, saw their real estate markets take a huge hit during lockdowns but have rebounded dramatically.
“We had people arriving in record numbers in 2021 and of course, this has spilled over into this year as well,” Mr Gunter said in the Global Luxury Landscape report.
“About 55 per cent of our buyers through the registered transactions are American and about 11 per cent are Canadians.”
According to Mr Gunter, luxury homes are fetching record prices, helped by a rapidly rising US dollar.
“Historically, in San Miguel, we’ve only sold about a dozen homes in a year that were US$1 million or more in value,” he said.
“For the last 18 months, it’s been about triple that.”
Managing Director of Berkshire Hathaway HomeServices London, Martin Bikhit said, international buyers were starting to return to the UK market, however, the pace was a little slower.
“International buyers accounted for 75 per cent of any sale over 10 million prior to the pandemic, but that completely reversed during the pandemic,” Mr Bikhit told Global Luxury Landscape.
“In their absence domestic buyers managed to secure properties at some very competitive levels, contributing to record-setting growth.
Mr Bikhit said demand is now returning to the UK luxury market, particularly for properties around Hyde Park.
“I expect that we’ll probably move towards a 60/40 situation in terms of global versus domestic buyers,” he said.
“We are seeing more and more American buyers and indeed Canadian buyers and I think a big part of that is taxation driven.
“Middle Eastern currencies are tied to the dollar and are quite prevalent here in the UK and in particular in London.”