The Sunday Times of November 27, 2022, featured an article by Liz Rawlinson titled “Coming from America“, highlighting the surge of high-net-worth (HNW) US-based property buyers in Dublin and London.
At Mortgage Direct Premier, we’ve observed a similar trend with US buyers purchasing ultra-luxury villas, investment properties, and main residences in Spain and Portugal, driven by favorable visa requirements and the attractive exchange rate.
Key drivers for US buyers in Spain
Favorable exchange rates
The significant shift in FX rates is a major factor, with EUR/USD market rates hitting a low of 1.03. Hannah Johnson from a leading UK-based FX company explains the benefits:
“EURUSD is the most traded currency pair, accounting for 30% of global FX conversions. In 2022 alone, clients could save $140k on a €1m property compared to January rates.”
Mediterranean lifestyle
US clients are drawn to Spain for its laid-back Mediterranean lifestyle, especially those who can work remotely. Cities like Barcelona, Valencia, and Malaga offer vibrant digital hubs, excellent transport links, and a favorable environment for tech firms and remote workers.
Transport connections
Direct flights from Palma, Mallorca, to the US, and increased connections from cities like Barcelona, Madrid, and Malaga, enhance accessibility. This has also led to a spillover effect in markets like Ibiza, Menorca, Marbella, and Valencia.
Mortgage solutions for US HNW clients
Retail vs. private bank mortgages
While private bank mortgages offering up to 100% LTV and 10 years interest-only are hard to come by for US clients due to FACTA, retail bank mortgages are still accessible. Competitive long-term fixed-rate mortgages in Euros are available from as low as 3.2%, fixed for up to 25 years for up to 70% LTV.
USD denominated mortgages
For USD earners buying in Spain, we offer foreign currency mortgages denominated in USD, fixed for the whole term from 4.85%. While these mortgages offer stable monthly repayments, clients should be cautious about exchange rate risks when converting sale proceeds back to USD.
Lifestyle benefits and investment opportunities
Spain’s well-developed real estate market, particularly in cities like Barcelona, offers excellent opportunities for US buyers in Spain. The introduction of digital nomad visas further encourages digital workers from outside the EEA to set up in Spain.
Contact us
For expert advice contact Howard (English & Spanish) at howard@mortgagedirectsl.com or +34 669 694 589 (Spain), +44 7984 166 704 (UK). More about Howard: www.linkedin.com/in/howardsteel/
For FX market insights and maximizing your property purchase, reach out to Hannah at hjohnson@privalgo.co.uk or 020 8132 6556.
