Is the seller’s market changing? Are agents keeping pace with the industry? Let's look at what both agents and buyers are saying about the international real estate market, its trends, and the buying process for the remainder of 2022.
Agent opinion: shift to a buyer’s market
We asked both international real estate agents and home buyers what they had to say about the real estate industry over the past year, with more than 1000 people answering our survey. For the most part, all is good despite rising prices, interest rates and the conflict in the Ukraine, as home-buying continues to be spurred by individual needs.
Agents in our survey believe that the increasing interest rates in many countries will have the most impact in a shift toward a buyer’s market. Here are the top factors that agents believe will impact the current markets the most:
Increasing interest rates
Availability of properties on the market
Conflict in Ukraine
One of the most common questions people have: “When is it the right time to buy or sell a home?” Well, the right time to buy or sell has less to do with market conditions and more to do with your family’s needs. But it pays to keep an eye on the market, which usually operates in cycles based on supply and demand. The cycle is shifting, and many in the industry are on target about the conditions that lead up to this shift.
Agent concerns about big topics
After having experienced a global pandemic, then the start of a war, it is no wonder that agents have big topics on their minds. When asked more about important factors that impact their business, agents from all surveyed markets (Spain, Portugal, U.S. and France) responded with concerns about political change, the after-effects of the pandemic, climate change, the way that business is conducted, and policy requirements (or lack thereof).
Let’s take a closer look at the concerns that agents are expressing about how they conduct business and what they can do about it.
“The pandemic was key in the change that occurred in the purchase and sale of real estate.”
Technology is becoming especially relevant to agents. Advances in software that handles virtual meetings with the client has become a must-have. Marketing tactics that adapt to more online buyer activity is vital to modern-day agents, and improvements in the exposure of property listings is essential. Have you checked out our products that do just that?
Buyer interest highly related to their personal needs
Over 66% of our surveyed buyers told us that they intend to purchase a property this year, with 20% of them planning to do so within the next 6 months.
As our respondents were from different markets, it can be expected that you would even have a seller’s market in one part of the state and a buyer’s market in another. Neighborhoods that have new or renovated homes might attract an influx of buyers, while in neighborhoods that have emptied due to a loss of job opportunities there might be an abundance of real estate at ‘deal’ pricing.
However, the most important factor when buying a home is your family’s needs. Price is just one aspect of the home buying experience you need to weigh against other needs, like location, nearby schools, amenities, and so much more.
Here are the top locations that buyers in our polled markets are looking to make their next property purchase, including both domestic and international interest:
Where are foreign buyerelooking for property in Spain?
2. Santa Cruz
3. Balearic Islands
Where are foreign buyers looking for property in Portugal?
|1. Faro District
|3. Porto district
Where are foreign buyers looking for property in France?
Agents told us that the main reason their international buyers were choosing to buy in another country this year so far, was for investment opportunity. Here is the ranked list of reasons for foreign home purchases, according to our agents:
Immigration or expatriation
Education and employment
Realtors found that of all their international buyers, the least amount of people moved due to education/employment in the past year. This is a good example of how the pandemic affected education practices by shifting to remote learning and working from home became quite commonplace, since 2020.
Searching habits of buyers
After a tumultuous year with rising costs and tightening budgets, consumers are home-shopping with more intention than ever in 2022. With a growing focus on self-care and finding an acceptable life-work balance, buyers have embraced ‘refreshing’ their home spaces and planning for more activities from their homes like exercise, schooling and being outdoors, have moved from public spaces to the private back yard.
Buyers predominantly search for property using online listing portals. Fun fact, did you know that 97% of all homebuyers used the internet in their search for a home?! (NAR) But some buyers indicate that they are also using social media platforms or search engines like Google. Agents, this is important - you need to be there when buyers are looking.
What are buyers looking for?
One of the best ways to find out what buyers are looking for is to ask our agents, who are ‘in the know.’ Agents reported that the residential property market saw the biggest increase in demand for urban locations near large cities. In a close second place was buyers looking to move away from large cities, then as well as those purchasing second or vacation homes. Property located in the suburbs was another popular category where buyers were searching.
Consistent with an increase in investment buyers arising from the housing market, agents found that sellers were attracted to the demand of the market. There was a comparable number of customers who were either upsizing or downsizing. With an aggressive seller’s market and fast-paced transactions, there was a rise in the use of Bridge Loans, especially noted by agents in France, but also overall.
Financing solutions for real estate buyers
Overall, agents told us that almost 24% of their client’s financing solutions were a Bridge Loan. Bitcoin or cryptocurrency (a relatively new player in the financial world), is still in early stages in the real estate market, but Bitcoin property purchases do occur. With the recent ‘crypto-crash in June this year, many real estate investors have been more cautious about the use of this currency.
Trends in buying and selling
The way that people buy and sell real estate in the past two years has changed. Here are the areas where professionals noticed the largest changes:
Pricing: With the increased interest in properties that supported the lifestyle changes resulting from changes in work and play caused by the pandemic, agents noticed that the most change in the industry came from the increases toward a seller’s market.
The way agents communicate with buyers: Ranked in the second place for amount of change in the real estate market, agents have widely adopted the use of tools like virtual home viewing, email/text and long-distance communication to begin the transaction with buyers.
Buyer Preferences: Preferences are leaning toward property that provides green space, can accommodate working or schooling from home, and locations that are removed from large city centers.
Interestingly, agents also indicated that major changes in the industry have occurred in these areas as well:
Technology has revolutionized the international real estate market
Lending, financing and banking processes have seen notable change
Government and policy decisions that related to pandemic measures are now phasing out and the worldwide community is carefully watching global events.
Sustainability is becoming an important factor for buyers. Energy efficiency, materials and home-tech features are more front-of-mind for buyers.
The way that agents conduct business in general has evolved, with the advent of virtual signing, financing etc.
"Buyers are much more attentive to opportunities. In a very active market, the professional has to be very close to the client to understand what their real objective is.”
French agents were quite specific about how their business is conducted and how buyer preferences have changed. Here is what they tell us:
Too many agents
Sellers have a bad image of the real estate profession
Some sell privately and do not work with agents
Credibility and general view of agents is not valued
Buyer expectations about their real estate agent
About 75% of buyers say that they do fill out an online form requesting more information about a property they saw listed for sale. Of those, 60% prefer that an agent emails them back, 26% would like a phone call and 14% prefer to use text or messaging. English and French speaking buyers preferred emails the most, and the Spanish buyers were most comfortable with a video call.
Buyers said that when they had submitted an online request, they did receive a response about 49% of the time and within 1-2 days. Agents, be sure to follow up with your leads! You will receive an email from us when we have interest in your property listing from a foreign buyer. 13% of buyers told us that they never receive a response.
The listing information provides important features about your property and here is the order of importance that buyers place on the type of information they see:
Location of property (city, province, country)
Attributes of property (# of bedrooms, floorplan, size)
Attributes of neighborhood
Amenities (pool or hot-tub, yard size, smart-home technology etc.)
If you would like to go above and beyond as an agent, here is a tip. Buyers told us that they would like to know most about the expenses attributed to the property, then in second place, they are interested in knowing more about the buying process in the country, followed by cost of living and culture of the area, and finally, buyers want more information on taxes in the country of their new property – which is not always available to them online.
In fact, buyers gave us even more insight into the relationship they have with their realtors. The qualities of a real estate agent that they find important are:
Prompt: the agent answers my messages quickly
Empathetic: the agent is a good listener who really understands my situation
Expertise: the agent is well informed about the market and current trends
Evolution of foreign buyers interest in 2022, according to surveyed real estate agents
Many countries have worked to mitigate the effects of the pandemic, and no one could have expected the turn that the housing market took amid the global health crisis. Many governments were forced to respond to the soaring market prices and inflation issues linked to this surge in buyer interest. We aksed agents how this affected foreign buyer interest and here is what they had to say:
Spanish agents reported the largest increase in foreign buying activity during the last year at just under 45%, while France reported the lowest increase. About 40% of Portuguese agents reported fluctuations in foreign buying activity, which balanced out within the year.
Overall, real estate professionals told us that their foreign buyer activity increased by 31%, at the same time that the domestic buyer demand increased, (51%) making for a busy selling season. However, where will the evolution of the global economy take us next in the international housing market?
Agent opinion is that the real estate market remained predominantly resilient.
French agents, had the least optimistic view on the market while North American and Portuguese professionals had the highest opinion about the market being resilient.
While confidence remains high that the real estate market can respond well to changes, the conflict in Ukraine is still ongoing. Only 9% of real estate agents believe that the conflict will adversely affect the international market for a time.
The importance of international buyers
As an agent who publishes on international portals, your business relies on reaching the global audience of buyers. Of our surveyed agents, 20% of them place a very high importance on international buyers, (especially in Spain and Portugal) while another 61% of agents rate international buyers as fairly important to their total business. In fact, almost 26% of all their leads come from foreign buyers.
International agents promote their listings
70% of our agents find that our listing promotions are very useful in their business. We believe that training is essential to develop international real estate experts. For this, we work hard to provide information on the international real estate market like webinars, videos, articles, and more.
We thank each agent and buyer for participating in our survey!