17 September 2018 – Eje Prime
Buying a second home with the objective of putting it up for rent. Currently, that is the main reason why more than 60% of owners around the world acquire an asset of that kind, according to a study prepared by Savills and HomeAwayTM.
“In a low-interest rate environment, investors look for assets that generate income”, says Paul Tostevin, associate director at Savills and the person responsible for the report. The situation has changed in recent years, given that, for example, at the beginning of the 2000s, only 14% of second homes were purchased with the objective of letting them and not for personal use. During the credit crisis, that figure increased to 19%.
The average purchase price of a second home in the Spanish market was €245,000 in 2017. Nowadays, almost 40% of owners obtain profits from their properties and approximately 30% partially cover the expenses associated with the asset.
In terms of the location of the asset, less than 5% of the second homes owned by Spaniards are located overseas. The main regions where they do own second homes in Spain include the Canary Islands (12%), the Costa del Sol (9%) and the Balearic Islands (9%). The increase in the arrival of international tourists in recent times has caused the owners of these homes to lease them more frequently to be able to obtain income.
In terms of the rest of Europe, the study reveals that Brits purchase the most second homes outside of their own country. Only 24% of their properties are located within the United Kingdom, 19% are located in France and 16% in Spain.
Original story: Eje Prime
Translation: Carmel Drake