Currency expert FairFx has revealed the best and worst destinations to purchase a second home overseas.
With Brexit approaching, a second home in the European Union may not offer the best value anymore, with those looking to buy a property abroad encouraged to look further afield instead.
FairFX compared the average price of a property in a country, along with the cost of other essential outgoings when in that country, to help potential buyers decide which place provides the best value for money.
The research analysed the average cost of a two-bedroom apartment, as well as a range of everyday costs, including: the cost of a car, monthly utilities, petrol, internet and mobile phone usage.
Based on property and living costs, the index revealed that (as of August 2018) Bulgaria and Brazil are the most affordable countries in which to buy a second home. They recorded a combined cost of £110,535 and £113,433 respectively.
Third in the list was Hungary (at £174,889), while Ireland finished in fourth place with average costs of £193,114 – which will please those looking for investment opportunities closer to home.
By contrast, Monaco topped the list as the most expensive location to buy property abroad, with the average property costing more than £7.3 million. When utilities, a car and basic living costs are factored in, this rises to nearly £7.4 million – some 66 times greater than a second home in Bulgaria.
Switzerland was the second most expensive place to buy a property overseas, albeit with more modest average costs of £679,879. The top 10 was completed by UAE, Germany, France, the USA, Barbados, Portugal, New Zealand and Spain – all with total average costs of more than £534,000.
For many people purchasing a second home overseas continues to be an attractive investment choice. Not only does it offer a place to jet off to on holiday, it can also provide a useful second income on lettings for those who choose to rent their property out as a holiday home.
Of course, value isn’t the only consideration for overseas buyers – those thinking about investing in a home abroad need to be aware of the political, cultural and economic conditions in the country they choose to buy in.
The cost of the weekly essentials will also be on the mind of those considering a home in foreign climes, and this was the thinking behind FairFX’s Weekly Essentials Index – which revealed the top five cheapest locations when it comes to buying a litre of milk, a loaf of bread, a dozen eggs and a bottle of both water and wine. Turkey topped the list, with a cost of just £5.26 for the weekly essentials, closely followed by Hungary, Bulgaria, South Africa and Czech Republic.
The most expensive locations, meanwhile, were the Bahamas, Barbados, UAE, Monaco and Switzerland.
“Potential buyers should weigh up which country is going to offer them the best value for their property abroad,” Ian Strafford-Taylor, chief executive of FairFx, said.
“‘Location, location, location’ isn’t just important for the views or scenery, but also makes a big difference when it comes to living costs as well as exchange rates.”
“Our Property Abroad Index looks at the average cost of a 2-bed apartment, as well as the essential things you need once you are there. To get the best value, it is important to do your research and take all living costs into account as well as how much a property will cost you initially.”
Strafford-Taylor also said it’s crucial that would-be overseas purchasers research the region they are thinking of buying in, keeping abreast of the political and economic situation at play to make an informed decision on whether or not the property could be a good long-term investment.
“Looking at currency trends will also give you better value for money too,” he added. “If you do your research it means that when you need to make international payments, you are doing it at the best time and saving yourself a significant amount of money in the process.”
FairFX has also compiled some top tips on getting the best value when purchasing property abroad, which we’ve reproduced below:
- Do your research. Looking at the cost of property, as well as how much it will be when you are out there, to give you an accurate indication of what you are likely to spend. Research the local area too – is it somewhere that will be attractive to holidaymakers who want to rent an apartment when you are not there?
- Plan ahead. Taking advantage of rates when they move in your favour could save you hundreds of pounds when it comes to making payments abroad or sending money to your overseas bank account for day-to-day living. Set up a currency tracker to monitor rates which will alert you to the best time to buy currency.
- How will your day-to-day spending affect you when you are there? Debit and credit cards are fine as a back-up but you may find you’ll be hit with a string of fees for using it abroad – as well as an unfavourable exchange rate. Instead, get a FairFX Prepaid Currency Card which you can top-up at any time and you can use for free in shops and restaurants.
- Think about banking. If you’re planning on opening a bank account overseas, watch out for hidden fees when transferring money and shop around for the best rate; don’t go straight to your bank.