AsU.S.Dollar Surges,Americans HeadAbroad

It?s hard to beat the dollar right now The US dollar has reached a decades-long high compared with struggling foreign currencies,including the euro and the pound It?s no wonder,then,that US buyers are flexing their buying power abroad

?Together with the high inflation in the US,the exchange rate appreciation may have influenced the acceleration of investments in the luxury segment,since North American buyers and investors have a stronger currency against the euro and,in this sense,greater purchasing power,? says Miguel Poisson,CEO,Portugal Sotheby?s Realty

Portugal is now among the top destinations for Americans purchasing property in Europe,along with markets including Spain,Greece,France,and Italy

?Over the past few years,we have seen a considerable increase in North American buyers and investors in the luxury real estate market in Portugal,?Poisson says ?Portugal is considered one of the most affordable countries to live in Western Europe,and much more economical than the US? Other factors attracting American buyers include high-quality healthcare,low crime rates,and a strong education system, Poisson adds

North American luxury buyers in Portugal are primarily interested in Lisbon,Porto,the Algarve,and the island of Madeira,Poisson says,and they tend to gravitate toward villas and condominiums that offer luxury amenities

Similar booms are playing out in other European markets

The percentage of high-end American buyers in Italy increased from 5% to 13% between 2021and 2022 alone, according to Diletta Giorgolo Spinola,head of residential,Italy Sotheby?s International Realty Notably,buyers?interest ?mainly shifted from the area of Tuscany in 2021to the city of Rome in 2022?

In Greece,?there is no doubt that a strong US dollar lays a solid foundation for increased interest in Greek luxury real estate,?says Savvas Savvaidis,president and CEO,Greece Sotheby?s International Realty ?However,it is hard to quantify the direct impact of currency parity,given that this year the overall interest from US buyers has exploded disproportionally? In the first nine months of 2022,?requests to Greece Sotheby?s International Realty from the US market for Greek luxury real estate have increased by 591% versus the same period last year,?he says

?In fact,this is the first year that requests from the US market have reached the levels of those arriving from Great Britain,the traditional top feeder market for the country,?Savvaidis says

?The American market favors the island of Corfu,with Mykonos coming in second,and Paros ranking third,? Savvaidis adds

With the British pound flirting with record lows,American buyers are also making the most of an opportunity to get into the UK market at a relative bargain

?I have buyers who sent an email the previous night,then jumped on a plane from New York to come see a penthouse that?s listed for GBP£15 million,?says Guy Bradshaw,managing director,United Kingdom Sotheby?s International Realty ?They know full well they can come in, use their dollars,and they?ve got a built-in exit strategy because they know the pound will go back up It?s a 3-to-10- year strategy that?s massively in play at the moment?

In some cases,currency fluctuations have provided an unexpected windfall for American buyers already in the middle of transactions A recent client saved around US$120,000 or US$130,000 because the pound dropped so much between the original offer and closing, Bradshaw says

The strength of the dollar is proving to have benefits for buyers based outside the U.S.,as well.

Between the ongoing volatility of financial markets and the continued strength forecast for the dollar,American luxury buyers may have plenty of impetus to continue investing abroad in the near future

In Portugal,?the pandemic reinforced US investors?interest in Portuguese real estate,with more and more investors keeping an eye on the country,?Poisson says ?In my opinion,this tendency of North American luxury buyers to purchase in Portugal will continue and grow even more in the years to come?

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