Since the start of 2020, nowhere in the world has escaped the virus or the severe disruption caused by measures to contain it. From California to Hong Kong, lockdowns and working from home have become a way of life. Economies have been stopped in their tracks, while the travel, hospitality and retail sectors have been decimated.
Conditions for cross-border property hunting have not been ideal. But that’s not to say all property markets have been affected adversely, or if they have many are now rebounding. Stimulus packages parachuted in by governments and central banks have helped a lot, complemented in many countries by historically low interest rates, with no signs of this changing. In the UK, the stamp duty holiday has given the market a noticeable boost.
With all this in mind, here are three contrasting overseas destinations that might appeal to luxury property-hunters in 2021.
Portugal’s famous Algarve coastline needs little introduction as one of the world’s top tourist destinations. In recent years though, it has become a go-to European option for foreigners in search of a home with low taxation and a laid-back, quality lifestyle. This is thanks to the combination of its Golden Visa scheme with its Non-Habitual Resident scheme (NHR), which offers a decade of generous tax breaks for new foreign residents.
The Algarve resorts of Vilamoura, Vale do Lobo and Quinta do Lago are established hot spots for house-hunters at the luxury end of the market. However, for less touristy but equally scenic destinations, the Comporta region, 120 kilometres south of Lisbon, is increasingly on the radar. Regarded by the Portuguese as one of the most exclusive areas to own a summer home, the region includes the Alentejo coast, which currently is seeing the launch of new hotels and exclusive residential developments.
“Portugal is one of the most sought-after countries in Europe to invest due to its advantageous taxation laws, the Golden Visa programme, its pleasant climate and the high standard of living. The combination of these reasons, together with a low rate of coronavirus cases this year and region’s proximity to Lisbon, is why we are registering strong demand in Comporta.”
A bastion of financial security set amongst glorious mountain scenery, Switzerland’s strong currency and aversion to debt are immediate attractions of owning Swiss Franc assets.
Much like the US dollar, its currency is a safe haven for international investors, especially when there is uncertainty in world markets, such as that created by COVID-19 and Brexit. Swiss interest rates are being held in negative territory (-0.75 per cent), making premium Swiss property especially attractive.
Bear in mind second homeownership by foreigners is restricted in Switzerland. For wealthy investors who become resident there its tax system, which levies taxes at federal, cantonal and municipal level, has attractive incentives. A popular option for foreigners, applicable in for example in Valais and the resort of resort of Verbier, is the Lump Sum Taxation scheme, which allows residents to be taxed on their annual living expenditure rather than worldwide income or assets. Equally, there are attractive schemes for foreigners wishing to set up a company in order to register and work as self-employed.
In Geneva, the lockdown effect means more homebuyers are opting to be away from the traditionally popular city-centre or opulent lakeside suburbs. Instead, today’s typical overseas relocators are choosing smaller communities such as Anières and Hermance, 10 kilometres north of Geneva on the left of bank of Lake Geneva. Knight Frank’s Geneva office saw a 60 per cent rise in enquiries in June 2020 this year compared to 2019.
The UAE’s most populous emirate is buzzing again. Recent figures from a leading Dubai property agency highlight just how bullish the market there is right now: sales transactions (volume) in November 2020 were up 42 per cent on the same month last year and lettings transactions rose 81 per cent year-on-year in December.
Pent-up demand, effective management of COVID-19 (the UAE is on the UK’s travel corridor list) and the anticipated economic benefit of hosting the world famous Expo 2020 (now 2021) are helping to drive things.
Another factor underpinning steady interest is the introduction this summer of the Dubai Retirement Visa. It forms part of the government’s new Retire in Dubai drive to encourage more wealthy expats to relocate or continue to live in the city.
“To be eligible for a retirement visa, an option is to own a property in the country that is not mortgaged and is worth no less than AED 2,000,000. Another option is to have a monthly income of AED 20,000 and we have had many enquiries of expats broadening their property portfolio in the city to build up their monthly income with retiring in the UAE at the forefront of their ambitions.”
Reflecting the effects of lockdown on buyer preferences, the agency’s most popular area for sales in the third quarter of 2020 was unusually the villa community of Arabian Ranches. Villa communities are proving to be in high demand as people value outdoor space now more than ever. Historically a temporary place to stay before moving back to their home country, signs point to Dubai maturing into a forever home for many of its resident expats.
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