Introducing Property Vision International: a better way to buy property abroadBack to Insights
As money becomes increasingly mobile, more and more of the privately wealthy are acquiring international property portfolios.
Attracted by strategic tax advantages, investment opportunities or – most commonly – the lure of an enviable lifestyle, this is a global trend. Research suggests that 125,000 HNWI’s will relocate this year, up from 51,000 a decade ago.
As a result, demand in the world’s most popular locations is hotter than ever. With the supply of special properties every bit as constrained as in the UK, the consequence is inevitable: prices are rising faster than at any time since the financial crisis.
For example: on islands like Mustique and St Barts, prices are increasing by 15% a year. The same is true in resorts like Jumby Bay, off the north-east coast of Antigua.
Why we’ve launched Property Vision International.
Buying a property overseas used to be seen as comparatively cheap - relative to an individual’s total wealth - and rarely required leverage. But higher prices mean higher jeopardy, especially since transaction and holding costs can be much greater than in the UK. Getting things wrong now carries significantly more risk.
Headline prices aren’t the only issue. At the top end, supply is excruciatingly tight. Knowing what you want and actually acquiring it are two very different things.
Buyers can also face markets that lack transparency, have disorganised planning controls, and function with unfamiliar processes and practices. Often, it’s not just the language that’s ‘foreign’.
Since the end of the pandemic, an increasing number of clients and intermediaries have come to us asking if we can help with challenges like these. In response, we’ve launched Property Vision International: a buyer-only solution that combines Property Vision’s proven levels of service with best-of-breed local expertise.
How it works.
We’ve hand-picked associates around the world, each with intimate knowledge of the country or region they serve. All are formally committed to replicating Property Vision’s ways of working.
The value-add goes well beyond simply saving buyers’ time. After years of monitoring their markets, our partners know where all the truly special properties are. They have the contacts to open doors that seem closed; the data to determine fair value; and the skills to help negotiate the best possible deal.
No one wants to discover after the fact that an apartment block is going to be built between them and their Mediterranean view, so our partners are expert at conducting due diligence. They can introduce the best local lawyers and tax accountants. If desired, they’ll even connect buyers to trusted architects, builders and staffing companies.
Property Vision in London maintains full oversight of every mandate and is only ever a phone call away. We frequently accompany clients on their first visit so we can make in-person introductions and ensure the chemistry is good.
Property Vision International is expanding all the time. Full details can be found on our website, but here’s a sample of the regions we cover.
The South of France.
Nigel Hindle, co-founder of Hindle Baldock, is a long-standing friend. In fact, he opened our French office when we were part of HSBC.
Nigel covers the area from Monaco, going west to Provence. As he points out: “There’s a huge range of different lifestyles on offer. Sometimes the client’s needs are obvious, such as Saint-Tropez and famous beach clubs. But often it’s not. One of the main ways we help buyers is by showing them locations they might not have considered.”
This breadth of perspective is invaluable when supply is short and prices are punchy. “Investors need to tread cautiously,” warns Nigel. “There are a lot of B-grade properties out there whose value would be highly vulnerable if the market turns down. A+ homes are definitely still available, but you need to know where to look.”
“The biggest shock for overseas investors is that selling agents here have absolutely zero interest in servicing the buyer,” says Susie Hollands, founder of Vingt Paris. “There’s virtually no open-source data, so there’s little incentive for them to act transparently.”
“I’ll give you an example,” she continues. “Agents will see a foreign buyer as a golden opportunity to shift a first-floor apartment. Think twice. These may be prized in other cities, but they’re deemed toxic by Parisians. Resale is always likely to be problematic.”
Whilst Paris remains a wonderful place to live, investors need to be conscious that a lot’s changed since the pandemic. Areas like The Marais are noticeably more crowded, often uncomfortably so. Instead, Susie is advising clients to consider more residential areas like the 16th arrondissement.
Buyers wanting to maximise returns should take a close look at Berlin. Prices have been rising by 10% per annum since 2004, but are still highly affordable compared to other major European cities.
So say Falk-Alexander von Oeynhausen and Prof. Dr. Friedrich-Carl Wachs, co-founders of Property Partners Berlin. But they point to one significant obstacle: “Whether the real motive is preserving local culture or blocking gentrification, Berlin is much more active than the rest of Germany in enforcing community pre-emption rights on who can buy what. Interpretations move fast and vary widely across the 12 districts.”
The good news, according to the pair, is that “problems are usually surmountable so long as you’re working with professionals who have a direct line into the relevant administration.”
Andrew Robson is the founder of Arawak Estates, the only property buying agency operating in the prime Caribbean market. He’s lived and worked in the region for many years, most recently in Antigua.
Current demand is exceptionally strong, with sales in the 2021/22 season running at twice the average level.
Acquiring property on islands like Antigua or Barbuda sounds like a pleasurable experience; but, as Andrew says, it can also be “fraught with uncertainty. The finest homes are seldom put to the open market and buyers often pay significantly more than necessary. Due diligence can also be challenging. Working with local experts is the surest way to avoid the frustration of slow-moving processes and idiosyncratic practices.”
The value Property Vision International brings.
Investors need expert representation when buying at the top end of any emotionally driven asset class, be that art, wine, cars, jewellery or real estate.
The need is even greater when investing overseas. Whilst there can be few people who haven’t dreamed of owning the perfect property abroad, the road to paradise is littered with stumbling blocks.
The pitfalls vary by country, but there are some common, over-arching themes:
1. Almost regardless of where they’re looking, buyers will be confronted by illiquid markets and very limited supply. Doors will need opening, and that requires partners with the right insights and connections.
2. Good data is unlikely to be publicly available. Investors will quickly discover that services such as Zillow and Zoopla are the exception rather than the rule. To ascertain a property’s true value, buyers need well-informed third-party advice.
3. Many people approach their search with blinkers firmly in place. Driven by nostalgic memories of blissful holidays, they want a specific type of property in a tightly defined area. Working with the right buying agent can help open eyes, steering them towards alternative locations that may provide an even better answer to their lifestyle needs.
4. Every country has its own legal and financial elephant traps, many of which are not obvious to the overseas investor. Buyers should never underestimate the value of high-class professional advice. Our partners will be happy to make introductions to local specialists who are at the top of their field.
It’s challenges like these that Property Vision International is designed to overcome.