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Second Home Market in Europe

VitaNova - Investment Consulting and Real Estate Agency in Montenegro

Second home is a new word for an old urge. Second home or Holiday home fulfills deeply rooted need one has in balancing one’s work and life. It is a profound urge to have a secure place, to feel peaceful and pleasant but to also breath a change.

But second home is not only that. Second home can be a very stable and attractive investment option for higher capital appreciation as well as for rental investment.

Perhaps second home used to be a relative’s home, a place we used to spent more time with our families, our relatives and friends. But not any more. A second home is a home away from home that you plan to use for a certain part of the year. Mostly, a second home is used as a vacation home. But it could also be a property that you regularly visit, such as a condo in a city where you often conduct business. Second home offers a variety of choices for its owner. Hence its volume and popularity are constantly growing.

For example, in Europe, although covid19 shook the world in a way never-before-seen, second home market in Europe doesn’t show signs of backing down. On the contrary, with the lockdowns and travel restrictions during the pandemic, more people have warmed up to this idea. But for different reasons. While some bought a second home in a sunny place to spend their old days, others choose to do so because they considered it as an attractive investment option for higher capital appreciation as well as for rental income. Since vacation homes are typically used for short spurts of time, they can be rented out when not in use by the owner.

Let’s look at some interesting data from EU second home market. One in six Europeans owns a second home, but the prevalence of second-home ownership varies significantly by country.

Data are from the Re/Max Europe, 2022., showing citizens owing a second home and average gross monthly salary.

Paradoxically, European countries with low average wages have some of the highest rates of second-home ownership. In Greece, where the average gross monthly salary is just €1,064, 32.8% of the adult population owns a second homes, whilst in Germany, where the average monthly wage is €2,609, the rate is just 5.4%.

The explanations vary, raging from the costs a property generates, such as the asset taxes when buying/selling and maintenance fees to a plain fear of being far away from it.

But there is also one very important thing about second homes. For a while now, second homes are not only second homes, they are second sources of income. Second home market in an evolving market showing tendency of growth in rental investments. Since second homes are empty most part of the year and at times bought only because of the rental income, this can be stable and profitable source of income, not only as a side income but as a major one. This is where Montenegro comes in showing a strong pulse of rent investment and growth projections in the coming years. But more of this in our next post. Stay tuned.

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