American Real Estate Buyers Boost European Home Prices

A new report reveals that American buyers are significantly driving up home prices in Europe, altering the dynamics of the real estate market.

The Southern European residential real estate market is experiencing a notable surge, largely thanks to an influx of American buyers, as highlighted in a recent market report. According to findings released this week by Savills, homebuyers hailing from the United States are emerging as pivotal players in elevating the price points of premium real estate in this picturesque corner of Europe, as first reported by Mansion Global.

With the dollar flexing its muscles and a burgeoning interest in the alluring lifestyle that southern Europe offers, Americans have become a “key prospective buyer base” in cities like Lisbon, Barcelona, and beyond. This foreign demand, when coupled with robust domestic interest and a conspicuous lack of supply, has propelled the region’s high-end housing market to the forefront, making it the best-performing sector globally.

Indeed, Savills’ analysis has anointed Lisbon, the vibrant capital of Portugal, as the fastest-growing luxury-home market in the world for the first half of 2024. Following closely behind is Amsterdam—yes, the one with the canals and bicycles—then Madrid and Athens, all of which have recorded capital value increases exceeding 3%. In fifth place, Dubai makes a notable appearance with a growth rate of 2.9%.

Meanwhile, across the Atlantic, the situation appears less rosy. High interest rates have cast a shadow over the American market, leading to a decline in prime residential prices in three out of four cities analyzed by Savills. Los Angeles, in particular, finds itself at the bottom of the list, with luxury real estate prices plummeting by approximately 4%.

Despite these challenges, real estate prices in the U.S. have shown a surprising degree of resilience during the first half of the year. The 30 cities examined by Savills recorded an average growth of 0.2%, slightly better than last year’s 0.6%.

Looking ahead, urban centers in southern Europe are poised for continued prosperity. The persistent mismatch between supply and demand for luxury residential real estate is expected to further fuel price growth in cities like Amsterdam, Lisbon, and Barcelona, where forecasts predict increases ranging from 2% to 3.9% in the latter half of 2024. So, it seems, the sun is shining brightly on southern Europe’s real estate market, and the Americans are basking in its glow.