Digital technology has given birth to a new generation of income-seeking second home owners
We have been surveying second home markets for more than a decade. A lot has changed in that time.
New technology, coupled with economic change has continued to alter what is possible for both owners and renters. Accommodation can be searched for, let and managed in faster, cheaper and more effective ways. Platforms such as HomeAway are part of this digital revolution.
The availability of digital solutions and the ease of letting property have generated a new breed of second homeowners. Economic change has also made these owners more likely to want an income from their residential assets at home and abroad, as well as the lifestyle pleasures of owning an additional home.
In future, more sophisticated and new technologies – and, with them, changing attitudes and practices among holidaymakers and tenants – will continue to shake up the hospitality, short-let and residential markets.
These industries will continue to develop as new technology opens up new opportunities and creates different ways of doing things. It is possible the distinctions between each sector will become increasingly blurred.
This report highlights the ways international second homes have changed over the last decade. It shows what owners have available, what they want in their new purchases, how they finance them and what short-term tenants and holidaymakers are looking for. In doing so, it points the way that future trends might lead.
- The global market for second homes has changed since the Global Financial Crisis (GFC). Buyers are prioritising income returns in a low interest rate environment.
- The rapid expansion of the short-let sector is at least partly due to digital technology which has helped to broaden the renter base.
- New digital service lines, and changing perceptions of the short-let and holiday home market, are likely to increase demand for second home renting in future.
- Demand from buyers has strengthened, especially for cheaper, high yielding and easy to manage new-build apartments.
- The British are no longer the dominant foreign purchasers in the Mediterranean. Other nationalities are growing faster: Germans, Dutch and Scandinavians are now as important.
- Broadband, balconies and beaches are the top three property features desired by buyers. Renters demand property-specific features such as air conditioning or swimming pools.
- The average purchase price of a second home in 2017 was $291,000. Annual rental income achieved was $21,000.
- Gross short-let yields average 6.4% (3.9% net, before taxes). One third of owners reported making a profit from their letting activity.
- Spain has risen in appeal as its recovery continues and was identified as the top foreign destination for future investment. Portugal is also on the rise, benefiting from a diverse and growing demand base.
Source: Savills, Full Article HereBack to Opinion & Insights