Early this spring, Philip White, CEO of Sotheby’s International Realty, was unsure what impact the pandemic would have on global real estate. What he would have been hard-pressed to anticipate was a notable boom across high-end sectors. “I expected parts of it, but it surprised even me how strong the demand is,” he says.
For many, lockdown provided the impetus to begin or fast-track the hunt for a second (or third) home overseas. With many being forced to work remotely, a job is not necessarily a tether to one city anymore. If you’re going to be toiling away in a home office, why not have the French Riviera outside your window?
For Miami real estate broker Sergio Llach, the pandemic was an influence both on his timeline for buying a second home in the Dominican Republic and on what he wanted in a house. “I was looking for this before the pandemic. However, the pandemic really solidified my decision,” he says. The home he ended up purchasing had several anti-COVID amenities: An at-home fitness room allows him to bypass the gym, and a designated service area for staff limits the number of people coming in and out of the house. The 3,500-square-foot, three-bedroom villa is located within the Casa de Campo resort, on the country’s southeastern coast.
With shops and restaurants around the world closed or operating at limited capacity, buyers are focusing much less on a house’s proximity to a bustling town and more on its ability to weather a storm. “People are looking for more space,” says White, who has had clients looking for homes in Spain’s Costa Brava, southern Provence, the Swedish countryside, and the resort area Brabant in Belgium. “These locations are appealing because they are not so far removed from their city counterparts and are still within driving distance.”
Those looking in Brabant, where gardens are a big selling point, can find listings starting around $900,000. The Sotheby’s Costa Brava listings tend toward villas and townhouses with sea views and range from $500,000 to $17 million.
The desire for a remote property can go to extremes. “There’s been a great increase in interest in private islands,” says John Christie, president of H. G. Christie, which is based in the Bahamas. “If you want to get away and have your own spot, then a private island is really the ultimate place.” He says a property’s being accessible only by boat used to be a significant detriment. Now, it’s seen as a plus.
H. G. Christie’s listings include Bonefish Cay, a 13-acre island within the Abaco Islands in the Bahamas. It has a main house, three bungalows, and two beaches and is located about ten minutes by boat from Little Abaco Island. It’s listed for $8.2 million. Victoria Point Cays, another island for sale, spans ten acres and has a main house and a guesthouse. It’s about 1,000 feet away from South Andros Island, which has an airstrip, and is priced at $2.9 million.
Virtual showings have become common, and brokers report that buyers have frequently purchased homes sight unseen. While some might rely on 3D tours and their brokers to convey all the details, hiring a property inspector or surveyor (agents can often provide a list) may help buyers avoid surprises, like poor water pressure or a questionable foundation.
Philip White recommends doing due diligence to learn the laws and residency requirements of any country before searching. Naturally, lockdown rules and quarantine restrictions can unpredictably alter travel plans regardless of residency or citizenship.
“Globally mobile individuals have always been very accustomed to being able to transcend borders quickly,” says Sue Nickason, vice president of marketing and sales for Dart Real Estate in the Cayman Islands. Fluctuating restrictions on border crossings, she says, have pushed her clients to consider locations where they can essentially purchase residency or citizenship status. Most notably, she has seen a marked increase in interest in the Caymans’ residency-by-investment program, which costs $1.2 million.
“It means they’ll be able to spend an extended length of time in the Caymans, be able to work from home, send children to school there, and get healthcare. The quest for residency status has really been pivotal to an increased level of inquiries from people looking to buy,” she says. “More and more, people are saying, ‘If I have to be in lockdown for an extended period of time, I want to go to a place that doesn’t just have great real estate, but also allows me to live my life as normally as possible.’”
Before You Buy
Philip White of Sotheby’s suggests hiring a tax advisor so as not to end up getting tax bills in both your home country and the one you’re buying in. Spain offers a Golden Visa program, which White says is of interest to many buyers because it can provide both investment opportunities and major tax benefits. “A lower income-tax rate is one of the reasons residency programs are popular, but today security is a bigger factor,” White says.
Purchasing sizable real estate in certain countries can facilitate a residency, or even citizenship. But each country has different requirements, and a lawyer should advise prospective investors on considerations beyond taxes, such as time spent there, education for children, and freedom of movement.
Spain and Portugal, for example, both allow residency with a real estate investment of at least $590,000. That way, one can move around Europe and apply for permanent residency after five years. Spain does not require buyers to spend any time in the country to have residency, and Portugal dictates only two weeks every two years. In the Caribbean, St. Kitts and Nevis levies no tax on overseas income, and the country grants full citizenship for a $400,000 real estate investment or a $150,000 donation.