Europeans increasingly buying second homes

Friday, 22, Apr 2005 10:42

The trend for Europeans buying a second home is growing, but it is probably not the time to buy as an investment, according to the European Housing Review.

The review, written for the Royal Institution of Chartered Surveyors by Professor Michael Ball, says many people across Europe are purchasing a second home either in their own country or abroad.

Typically, they are purchased for leisure purposes and may be rented out. But the investment aspect is a significant one as they tie up a significant amount of household assets.

The market in second homes has boomed in many European countries over the past five years, and the review warns that while an imminent crash is unlikely, the second homes market is at a greater risk of crash than the primary homes market.

Professor Ball comments: "Europe has had some of the liveliest second homes markets over the past five years, but if people are looking for a second home as an investment rather than a holiday home, it is probably too late to expect good returns as the market is currently at its peak."

Southern European countries, such as Greece, Italy, France and Spain, are the most popular countries for second homes both due to local and tourist demand. As much as ten to 15 per cent of the housing stock in these countries can be second homes.

And despite believing the market to be at its peak, Professor Ball believes lower living costs abroad and cheap flights make the trend for second homes only likely to continue to increase in the long-term.

Earlier this week a survey for Homebuyer events found that 72 per cent of the nation's youth are considering moving overseas, with one person in five saying that if they came into a large sum of money they would pack their bags.

And last month property investment specialist Assetz International tipped France as the next big thing for property investors.

Prices in the Cote d'Azur and Languedoc are reportedly rising between ten and 15 per cent per year, while Paris and the Alps are still enjoying a strong property market.