Resorts emerged as a travelers’ favorite during the pandemic, becoming a global trend, be it sun or ski locations. For some, the transition to hybrid working or early retirement prompted them to seek out newer experiences. According to Knight Frank, markets like Provence, Tuscany, the French Alps and Barbados were among the hotspots with no let-up inquiries in 2020.
A recent report by Knight Frank says currency also drove the popularity of resorts, with dollar and dollar-pegged buyers seeing double-digit discounts in the eurozone due to currency shifts alone in 2022. The volatile performance of alternative asset classes and the futility of leaving large amounts in the bank motivated a section of people.
Despite supply in many resorts gradually recovering from pandemic lows, it has not yet returned to pre-pandemic figures. Limited prime stock prompted faster decision-making among buyers in 2022.
The discretionary status of the second home market meant fundamentals differing from mainstream housing markets. A higher volume of cash buyers reduces but doesn’t remove its exposure to increasing mortgage costs.
Among those dependent on finance, a small portion may sell or downsize when a move incurs a steep rise in monthly payments. Maximizing rental income in the interim as a hedge against inflation will then become their priority.
The report identified some policy measures which influenced the performance of global housing markets in 2022 and those earmarked for 2023:
COOLING MEASURES
Los Angeles: A new mansion tax will be levied from April 1. Properties worth more than $5 million will be charged an additional 4% tax, rising to 5.5% on sales of more than $10 million.
Canada: A two-year ban on non-residents, barring temporary residents and international students, buying residential property was introduced on January 1.
Singapore: For some mortgages, stricter loan-to-value rules went implemented on September 30, 2022. Private homeowners now have to wait 15 months after selling before they can buy a Housing Board resale flat.
Spain: On net assets of more than €3 million ($3.27 million), a new “Solidarity Tax” is being charged as a temporary solution. On the other hand, taxpayers in Spain can apply a reduction of €700,000 ($763,574), with an additional €300,000 ($327,246) deduction for principal dwellings.
Australia: The application fee payable by non-residents buying residential property has doubled since July 29, 2022. Fees currently range from A$4,000 ($2,674.22) to A$1,045,000 ($698,639), depending on the property’s value at the time of sale.
SUPPORTING MEASURES
The U.K.: The nil Stamp Duty Land Tax rate has surged from ÂŁ125,000 ($155,610) to ÂŁ250,000 ($311,220) since September 23, 2022. The measure will end on March 231, 2025.
Thailand: A new Long-Term Residency Visa program was introduced in September 2022, which offers an extendable 10-year residence and work permit. The measure aims to attract one million wealthy non-residents in the next five years.
Hong Kong: Tax concessions for investments managed by eligible family offices were introduced in January. Individuals earning more than HK$2.5 million ($320,200) per year and graduates of the world’s top 100 colleges are eligible for two-year visas.
Singapore: January saw the introduction of a five-year visa program for people earning a minimum of S$30,000 ($22,300) per month in fields like finance and technology. The visa program also grants their spouses eligibility to work.
The U.A.E.: From October 2022, individuals can apply for a new five-year self-sponsorship visa, which includes residency permits for immediate family members. The requirement of an Emirati sponsor for 122 business activities has been eliminated.
