Home away from home
Prices fell in 17 European countries during the third quarter of 2010, including Britain, Italy, Portugal and Spain, according to the Knight Frank Global House Price Index. Prices fell furthest in Greece during those three months, by 2.9 per cent.
International buyers are purchasing mainly in established holiday home markets, such as the Swiss Alps, southern France, southwest England and the Italian region of Tuscany, says James Price, partner at Knight Frank. 'People are going back to the tried and tested areas.'
In Britain, Hong Kong buyers are benefiting from falling property prices and the weakness of the pound, which helps the Hong Kong dollar stretch further in that country's housing market.
Hong Kong investors have bought fractional shares of holiday homes in Scotland. In such a scheme, each owner has an equal share of the property and time that can be spent there.
Twenty-four fractional shares of apartments at The Residences at Pittormie in Scotland were sold to Hong Kong buyers last month. Located at St Andrews, fractional owners of this scheme's 20 two- and three-bedroom apartments are entitled to play on the town's golf course. Each apartment will have a maximum of 24 owners. Fractional shares are available at prices starting from HK$1.25 million. Apartments can be bought as whole units.
Tom Lawrence, chairman of Eden Club, which is developing The Residences at Pittormie, says his company is negotiating sales of an additional 12 fractional shares to Hong Kong investors. 'It's the ideal solution to second home investment,' Lawrence says. 'Instead of owning and paying for a home you only use a few weeks a year, you can own the time you will use.'
Hong Kong buyers are appearing in Europe. A Hong Kong-based Western expatriate bought a house at the 3,000-acre Castello di Reschio Estate in Umbria last month. Estate owner Count Benedikt Bolza is renovating and converting 50 farmhouses into holiday homes. Prices start at Euro4 million (HK$40.2 million) for a four-bedroom house and two acres of land.
The facilities include a concierge, restaurant, cookery school, private chef, and an opportunity to ride dressage on Andalusian horses or ride out into the countryside. Tennis, mountain biking and water sports are also on offer. 'Tuscany and Umbria have had a pretty good level of transactions throughout the year, largely based on people reducing prices and it being a prime area,' Price says.
Property values are rising in Switzerland. According to the Knight Frank Global House Price Index, they edged up 0.6 per cent in the third quarter of 2010. Its holiday homes market is buoyant partly because of the country's low taxes, Price says.
Oversupply means the Spanish and Portuguese holiday home markets remain weak, Price says. However, the Spanish island of Ibiza and the Portuguese island of Madeira are attracting overseas buyers.