Italian Real Estate

Crisis opportunity – Prices for holiday homes are falling

Posted on | September 1, 2010 | No Comments

Across Europe, the economic crisis has pushed down the prices of holiday homes, especially in Spain, but also in Italy and France, two other favorite holiday homes markets, there were significant reductions. Time to buy then? Experts warn: Buying too fast is a huge risk – or as investors say: Don’t try to catch a “Falling knife”.

The acronym PIIGS stands for European debt countries Portugal, Ireland, Italy, Greece and Spain, and is probably already well-known. But who knows FIS? It stands for France, Italy and Spain, some of the most popular destinations and markets for European holiday homes owners.

Overlap between the two groups of countries are rather random, but for all those who play with the idea to acquire a private vacation home, a great crisis opportunity arises. Those countries have been hit hard by the economic crisis. The result: Real estate prices have come down to the basement – including those for holiday homes.

This can be observed particularly well in Spain, where the holiday property market appears to be part of a veritable bubble burst. Estimates from brokerage companies and data supplied by Kyero, suggest a drop in prices for properties in Majorca and Menorca since 2008 of about 15 to 30 percent. As always in real estate, location counts: prime real estate in best locations has hardly suffered any price decline, while the market for simple standard flats has nearly come to a standstill, whereas in the mid-range sector price-reductions of about 20% have been registered.

This is part 1 of 3, stay tuned for part 2 of this article in the next days.

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