Americans are trading up their expensive US homes in favour of the expat life, where they can capitalise on the strong dollar and are more sheltered from the cost of living crisis.
US demand throughout Europe is rising rapidly, and Portugal in particular is emerging as a destination favoured by American citizens. According to government data, the number of Americans living in Portugal rose by a hefty 45% in 2021 alone.
And with the recent euro-dollar parity, more people in the US are bound to follow suit. Now, with the dollar strengthening against the euro, Americans tourists and investors can get a lot more for their money across much of the European Union.
The dollar remains strong
The drop in the euro’s value is a result of various global economic changes—namely, the pandemic, inflation, the war in Ukraine and a resulting energy crisis that is ravaging its way across Europe. While these factors have also impacted the US, Europe is experiencing a much harder hit, with the dollar remaining strong in comparison.
The falling euro is a positive development for those interested in buying property across the North Atlantic. In fact, even those who had no interest in property investment five years ago are trading their US homes for more affordable European alternatives. Better still, by converting their savings to euros, expats can boost their bank accounts and live for less—a welcome advantage in light of the global cost of living crisis.
US real estate prices soar
That said, the favourable exchange rate isn’t the only reason Americans are relocating to Europe.
After eight years of strong house price growth, the US experienced its greatest y-o-y increase ever recorded in the year up to July 2021 (according to the S&P/Case-Shriller Home Price Index). Subsequently, American residents are finding it difficult to upsize or break onto the property ladder.
And US tenants are having an equally hard time. As inflation worsens, rental asking prices continue to climb. Fortune recently revealed that the average apartment in Manhattan eats up almost 90% of the average salary at a whopping $5,000+ a month. Who wouldn’t want to trade this for a luxury villa in the Algarve, or a penthouse apartment on Spain’s Mediterranean coast?
A new life overseas
With the rise of remote working, people have much more flexibility in terms of where they can live. This has facilitated widespread migration between America and Europe—but also across the rest of the world.
Many Americans are keen to escape increasing rates of violence and unnerving political tensions across the country. And various Golden Visa programs make EU countries an attractive destination. Americans can purchase properties overseas and benefit from citizenship in their chosen country, an EU passport, and access to quality education and healthcare.
In addition to the wealthy and the retired; middle-aged and middle-class Americans are relocating to Europe in increasing numbers.
Meanwhile, those that are keen to stay put are wisely investing in holiday homes and other ventures across the pond.
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