Wealthy American Buyers Fuel Soaring Home Prices In Southern Europe

According to a new report from Savills, American buyers are strongly influencing Southern Europe's luxury residential market.

The report identifies U.S. homebuyers as a primary factor in escalating prices for premium properties across the region.

Lisbon claimed the top spot for fastest-rising luxury property prices globally, with values increasing by 4.2% from January to June. Prices in the Portuguese capital outpaced all other prime property markets tracked by the real estate firm.

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American buyers are fueling a luxury property boom in southern Europe. Lisbon, Amsterdam, Madrid, Athens and Dubai saw the biggest price increases, driven by a limited supply of high-end homes.

Savills noted that a strong dollar and growing interest in the European lifestyle lure Americans, who are now a "key prospective buyer base" in southern European cities.

But that's not the only reason Americans are considering moving abroad. After President Joe Biden's perceived weak performance in the debate against Republican nominee Donald Trump, inquiries about relocating overseas have increased.

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"People say they want a plan B," immigration attorney Jean-Francois Harvey of Harvey Law Group told Realtor.com. "They are worried about political instability."

Relocating overseas can be a smooth process, and many countries welcome Americans. They also offer a lower cost of living compared to the United States.

"I can get you a visa for Spain in a few weeks," Harvey said.

Harvey said people considering moving abroad should look at countries with steady real estate prices, low cost of living, stable political and economic environments, easy commute to the United States and large English-speaking populations.

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While the U.S. luxury housing market faced headwinds from rising interest rates, the global prime residential property sector demonstrated resilience. Prices for luxury residential properties fell in three of the four U.S. cities Savills studied. San Francisco was the sole U.S. city to record price growth of 0.7%, while Los Angeles suffered the steepest decline at 4%.

Despite economic uncertainties, the global luxury housing market proved resilient, with prices increasing by 0.8% in the first six months of the year, exceeding initial projections.

Strong performance in over half the cities studied reinforces confidence in prime residential property as an asset class.

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"We predict an average capital value growth of 0.5% for the second half the year, which would bring total 2024 growth to 1.3%," Kelcie Sellers, associate director at Savills World Research, wrote in the report. The ongoing supply-demand mismatch for high-end residential products is projected to fuel price growth in European cities such as Amsterdam, Lisbon and Barcelona, where 2% to 3.9% is forecast in the second half 2024.

People considering relocating abroad will typically need to demonstrate a reliable source of passive income like a pension, dividends or rental property. The income should be sufficient to cover living expenses without needing a job. Some countries offer residency in exchange for making a significant investment.

"The concern is that you could spend, waste or lose your bank and investment account money," says Lief Simon, founding partner at Live and Invest Overseas. "But a pension or proven reliable passive income keeps funding your living expenses."

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