Not so long ago, a second home was reserved for the very wealthy. As the price of a second home became more affordable and thus accessible to the middle class, increasing numbers of Western Europeans and Americans began to board trains and fight weekend traffic to reach a cosy retreat outside the city. A decade of low interest rates, higher incomes and rising property values, combined with cheap airfares and the ease of telecommuting has created huge growth in second home markets. Buyers are now seeking properties around the globe.

The Mediterranean, Caribbean and the southeastern coast of the USA have long been holiday destinations for the British and Northern Europeans seeking sun and warmth. At the same time, winter sports enthusiasts trekked to popular ski resorts worldwide. Increasingly, travellers are buying property in these locations, making a favourite holiday spot their second home. Many vacationers are even planning to permanently relocate to these “vacation houses”upon retirement.

Second-Home Market Economic Driver

The second home phenomenon has had a significant impact on the global economy. In the U.S., according to a recent study by the National Association of REALTORS® (NAR), there were 3.34 million second home sales in 2005 - up 16 per cent from the previous year. Foreign buyers represented a significant portion of this business. The relative weakness of the dollar to the euro and the pound has made U.S. real estate a highly attractive investment for European buyers. A 2005 NAR survey showed that in Florida, 15 per cent of total home sales in the state were to foreign buyers, 58 per cent of whom were European.

Southern European markets have also benefited economically from the second home boom without offering any particular currency exchange advantage. The Royal Institute of Chartered Surveys estimates that in countries such as Greece, Italy, France and Spain, between 10 and 15 per cent of housing stock is second homes.

Spain, in particular, has been flourishing since 1997. In 1999 alone, 450,000 new homes were built in Spain, half of which were sold to foreign buyers. In 2005, according to Grupo Planner, organisers of SIMA, an annual second home show in Madrid that attracted 157,000 consumers at its 2006 show, the Spanish second home market accounted for more than 27 per cent of the demand for homes in Spain-approximately 120,000 newly constructed units. The most active buyers in Spain are the British and the Germans, who together represent 50 per cent of the demand. Also investing in increasing numbers are Norwegians, Swedes, Belgians, French, Irish, and Dutch.

Americans are also buying abroad - many in Mexico, where it is estimated that one million people own property. They are increasingly buying in Central and South America, where the value of the dollar provides a lifestyle beyond what they can buy within their own borders, while offering the relaxed, slower pace of life enjoyed south of the US border.

Hot New Second Home Markets

Most recently, markets in Central and Eastern Europe - such as Turkey, the Black Sea region, and the Croatian and Montenegrin coasts - are capturing the attention of second home buyers. A number of Latin American regions are also hot investment/second home markets, notably Buenos Aires, Panama City, the Pacific coast of Nicaragua, and Mexico’s Lake Bacalar and Costa Maya. And not to be excluded are Asia and the Middle East which offer interesting opportunities, including Dubai’s Palm Islands and Chaing Mai, Thailand, a centuries-old artisan community where International Livingreports you can buy a charming two-bedroom house for about €40,000.

These locales, along with many others, present wonderful opportunities for buyers, whether they are seeking a holiday retreat, a retirement home, or simply an investment; however, buying real estate in foreign markets can be risky and is generally more complex than buying property locally.

Developing markets see the economic value of foreign buyers and many have changed property ownership laws to attract them. Most still have some restrictions or require a specific legal structure for foreign ownership.Even the mature, sophisticated markets of Western Europe and North America have tax, title, insurance and other ownership parameters that foreign buyers must research carefully before purchasing. And even experienced buyers of foreign property cannot always anticipate the cultural clash that an influx of foreigners into a market sometimes creates.

Launch of Global New Home Resort Portal

In response to the burgeoning second home market and the growing demand for real estate professionals to assist buyers with foreign property transactions, a consortium of leading real estate associations around the globe has recently launched an online portal. The Global New Home Resorts portal at www.WorldProperties.com is a service of the International Consortium of Real Estate Associations (ICREA), and is powered by Prudential Florida WCI Realty, a Florida-based real estate brokerage.

WorldProperties.com allows consumers and industry professionals to view select properties worldwide. It offers an extensive search tool for residential and commercial resale properties; industry business practice information by country, including information on foreign ownership; and a cross-border referral system for brokers based on a global network of two million real estate professionals with three million listings.

The Global New Home Resorts portal at WorldProperties.com is more than just a property search tool. “The site allows consumers to search for a lifestyle,” says Prudential Florida WCI Realty President and COO Rei Mesa. “Buyers of second homes want to know about the surrounding community and what sort of amenities they can expect with the property.” The portal is not limited to warm locales or beachfront properties. It includes first-class properties in the United States, Europe, and Central America ranging from beaches to golf courses and ski resorts.

The new portal is an important service designed to ensure consumer protection and satisfaction. Buyers seeking new homes for holiday or retirement use, or for investment purposes can be confident that the builders and developers represented at the site are reputable and known within in the industry. It is a level of confidence that is simply not possible to find by randomly searching the internet.

The Global New Home Resorts portal is just one of the broker and consumer services available through WorldProperties.com. The site was created to assist brokers with crossborder transactions. The consumer, however, is the real winner because brokers affiliated with ICREA member associations adhere to a code of conduct focusing on quality service and ethical treatment of all parties in the transaction.

“We consider our alliance with WorldProperties.com an essential strategic partnership that guarantees our clients’ properties will reach the widest possible market with exceptional customer services available only through our brokerage,” says Mesa. Prudential Florida WCI Realty specialises in the sale of residential properties in luxury markets, upscale golf course neighbourhoods and coastal communities throughout Florida. He goes on to say,“We have always gone the extra mile for our clients. I’m excited to say that now, having partnered with WorldProperties.com, we are going an extra 5,000 miles and opening the doorway to Europe for our valued clients.”

The Global New Homes Report portal was launched in April 2006. For the first few months the number of development projects will be limited to ensure the infrastructure that allows brokers to serve clients is operating at top effectiveness. It is anticipated that by the end of the year, the system will be opened up to any qualified developer or project meeting the high standards of the WorldProperties.com site.

Biography

Timo A.B. Smit Timo currently serves as co-chairman of ICREA’s Executive Committee.

He sold his company Christiaan Smit, to Meeús Realtors, one of the largest companies in real estate/assurances in the Netherlands. The company handles both residential and commercial transactions. Mr Smit served as Vice President and President of the NVM (Dutch Association of Real Estate Brokers and Real Estate) from 1995 through 2001. He has taken his experience gained in organised real estate and shifted his focus to the international real estate arena. Timo represents NVM on the Executive Committee of the International Consortium of Real Estate Agents (ICREA) and was instrumental in the organisation’s formation.