08 August 2013

Baby Boomers buying in Spain and Greece

The holiday home market is riding high on the back of baby boomers according to a new report. Confidence is higher than it was even before the financial crisis, with 38% of baby boomers considering buying a holiday property and 10% intending to buy abroad.

The reason for this appears to be two-fold. Firstly, many of the baby boomer generation are in or approaching retirement. They made most of their money before the crisis hit, and haven’t been as affected by unemployment. They are also asset-rich, in that they mostly own their own homes, having bought them when house prices were a lot cheaper in the 1960s and 1970s. As such, the vast majority of boomers are looking to buy outright, without a mortgage.

The second reason is the lower property prices abroad. Places like Spain have suffered dreadfully in the crisis, with the price of property falling as much as 70% in some areas. Spain is the most popular destination for Brits buying homes abroad, either as a holiday property or as a permanent residence.

There are however a couple of stumbling blocks for UK buyers. The first is the poor exchange rate between the pound and Euro, meaning not all of the savings will be passed on once the money has been exchanged.

 Another thing to consider is that prices still have further to fall in areas such as Spain and Greece. Standard and Poor expects Spanish properties to be worth 8 per cent less on average by the end of this year, and another 5 per cent by the end of 2014.

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