Below is a guest post from currency expert Peter Lavelle on why 2019 could work out to be a smart time to invest in Spain for international buyers due to the fall of the euro.
Do you plan to buy a property in the Mediterranean this year, with Lucas Fox?
If this is the case, you might have your eye on a new build, three-bedroom apartment in Eixample Izquierdo, Barcelona, for €975,000.
Alternatively, you could be planning to buy a seven-bedroom house with a terrace in La Massana, Andorra, for €1,055,000.
Either way, when you transfer money to Spain, Portugal or Andorra from your home country, to buy Mediterranean real estate, you’ll want to get a highly competitive rate of exchange to maximise your euro total.
This is because, when you transfer money at a higher exchange rate, you receive a larger amount in euros in your bank account. In turn, this contributes to making buying property with Lucas Fox more affordable for you.
With this in mind, whether you’re transferring money from the UK, Sweden, Russia or China, what’s your currency’s interbank exchange rate versus the euro in 2019, and what’s affected it?
Well, let’s take a look, and illustrate how your currency’s recent movements against the euro could make buying Mediterranean real estate less expensive for you, compared to if you’d transferred money in the past.
Please keep in mind that the exchange rates discussed in this article are the interbank exchange rates. These are the rates that banks use to transfer huge sums between each other on a daily basis, and can’t be accessed by individuals. However, we can use these to illustrate how the movements in the exchange rate might be in your favour.
1. The British pound (GBP) has strengthened by close to +2 cents versus the euro (EUR) since the start of this year.
If you’re a UK client of Lucas Fox, it might please you to know that the British pound has risen by close to +2 cents versus the euro in 2019 so far, from 1.1087 on January 1st to 1.1270 now.
This is an increase in percentage terms of +1.65%. In part, sterling’s rise in value is because the EU has extended the UK’s Brexit deadline to October 31st, alleviating fears of a no-deal exit.
This might be useful information for you, for example if if you intend to transfer £630,000 to Spain to buy a five-bedroom villa in Olivella, Sitges.
2. Since mid-May, the Swedish krona (SEK) has risen by +1.99% against the EUR.
In particular, Sweden’s currency has risen from 0.9229 versus the Eurozone’s common currency on May 10th, to 0.9413 at the time of writing.
If you’re a Swedish client of Lucas Fox, thinking of purchasing a two-bedroom flat in Sol, Madrid, for €790,000 for example, this could be helpful for you to know this year.
3. The Russian rouble (RUB) to euro interbank exchange rate has gained in value by +10.67% since January 1st 2019.
For Lucas Fox’s Russian clients, you might find it beneficial to know that the rouble was at just 0.1255 at the start of this year, and today it’s at 0.1389.
In turn, when you transfer money from Russia to the Mediterranean, this could make buying a Spanish, Portuguese or Andorran property more affordable for you, compared to any time in the preceding five months.
The rouble has risen since the start of this year, because the price of oil, Russia’s biggest export, has increased in value, to US$75 a barrel.
4. Since the start of 2019, the Chinese yuan renminbi (CNY) has climbed by +2.21% against the euro.
To be specific, the yuan stood at just 0.1267 on January 1st this year, and today its value is 0.1295.
As a result, if you’re thinking of transferring money to Spain from China, to buy a two-bedroom attic for €399,000 in La Seu, Valencia, you might now find this more affordable, compared to if you’d exchanged currencies at the start of 2019.
The yuan has risen versus the euro, in part because the Eurozone’s economy has slowed this year, which could encourage the European Central Bank (ECB) to keep interest rates low for longer.
So to conclude, it’s an excellent time to buy a Mediterranean property with Lucas Fox, whether you’re a British, Swedish, Russian or Chinese client.
This is because the values of the pound, krona, rouble and yuan have risen versus the euro in 2019, which could make buying real estate in Spain, Portugal or Andorra more affordable for you, compared to the recent past.
By Peter Lavelle at foreign exchange broker Pure FX, a trading name of Foreign Currency Direct Plc
Please note that the exchange rates within this article are interbank rates and are for indicative purposes only, and are not trading levels which Pure FX offer. For live trading levels contact one of our currency brokers on +44 (0) 1494 671800.
This article does not constitute advice to any person on any matter and it is not intended as a recommendation to trade. Pure FX makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to any loss arising from actions taken as a result of acting on this information.