What changes during a recession in the holiday market? In previous recessions people gave up their holiday as an unaffordable luxury. This time round people see things differently: of course, a six week cruise in the Seychelles might downsize to a week or two in France, but this time round the holiday is indispensible. (Also see this). But the inexorable collapse of Sterling against the Euro makes things a bit more uncertain for UK holiday makers with many preferring to wait and see what happens to exchange rates: after all, what’s the point in going to the Eurozone for a holiday if you can’t afford dinner? Some tips on how to turn the economic uncertainty to your advantage.
- Make the most of exchange rates. Some European owners deal in Euros. Most UK owners deal in pounds. If you are spending pounds then you will find that many villas are 15-30% more expensive than they were last year. Houses that are priced in Sterling are not. That means that there is a split in the market between the two: one group is relatively more expensive than the other. And why would the European owners take less than they did last year? So the first tip is do your research. Learn what villas are worth by comparing many houses in a particular area from different sources. Soon you will find the pattern and the bargains will stand out.
- Don’t rely on discounts to give you a sense of value. (Here’s why) . Just because something is discounted by 30% does not mean it wasn’t 50% too expensive in the first place!
- Don’t wait. If you think that prices will fall when the pound recovers against the Euro then you must be looking at houses priced in Euros, which are currently expensive compared to houses priced in Sterling (see point 1). But the more you wait, the more the houses that really are good value are going to get snapped up. If you are waiting because you are nervous about the cost of a dinner then take a chance: economists think the Euro is currently overpriced. (But you might be right: anything can happen at the moment.)