A number of factors play a central role when making the decision to purchase a holiday property. The most important criterion of all, however, remains location. These are just some findings from the current study carried out by Engel & Völkers in collaboration with the Forsa Institute for Social Research and Statistical Analysis. A total of 506 holiday property owners were surveyed as part of the study, along with 511 people planning to buy a holiday property in the next one to two years. It was conducted between 29 June and 30 July 2021 with the help of the prestigious online panel forsa.Omninet. “We are observing a growing trend towards the purchase of holiday homes as income properties, and also as places for remote working in a different environment to owners’ primary residence, which is usually in an urban setting,” says Sven Odia, CEO of the Engel & Völkers Group, who adds: “Those interested in a holiday home are increasingly looking to locations abroad.”
Forsa study: Engel & Völkers examines buying criteria and intentions for use among German holiday home owners and prospective buyers
Important factors when buying second homes
The restrictions imposed as a result of the pandemic have led to a growing shift in many people’s private lives and work routines towards the home. “Rising demand for functional living spaces and an increase in the amount of time we spend at home has gone hand in hand with a desire to have even more space and plenty of places for privacy and seclusion in a second home,” Sven Odia explains. Accordingly, location was the most important criterion for the majority owners when investing in a holiday home: 89 percent stated that they felt this was (very) important when buying. For 72 percent of respondents, a garden or outdoor space was also (very) important. The number of rooms was important for 57 percent, while 46 percent were particularly interested in having an expansive living area. The study found that prospective buyers pay even more attention to location when looking for a home (94 percent), and to being able to make use of a garden or outdoor space (84 percent). Moreover, for 67 percent, the number of rooms is particularly important. The majority (51 percent) also regard a generously sized interior as a key factor involved in a purchase.
Location and surroundings
Around two thirds of owners (63 percent) stated that Germany was the location of their holiday property, while only approximately 36 percent own a property abroad. With regard to prospective buyers, on the other hand, about half of respondents intend to purchase a holiday property in Germany, while 43 percent are looking specifically for a property abroad.
Among the holiday property owners surveyed, a clear majority (77 percent) own a property in a rural location, while the ratio of holiday homes in urban locations is just 22 percent. Meanwhile, among those intending to purchase a holiday property in the future, this difference is even more pronounced: 85 percent of prospective buyers stated that they were looking for a property in a rural location, while only 10 percent were focusing their attention on an urban location.
Private usage, ROI opportunities and rental periods
“While the majority of holiday home owners (70 percent) use their property themselves, prospective holiday home buyers are also looking more and more at the potential for returns on an investment,” Sven Odia reveals. Only around one in five owners share their property with others on a temporary basis (21 percent). In such cases, most owners (38 percent) rent out their property for a period of between 17 and 32 weeks per year.
Among those interested in holiday properties, on the other hand, almost two thirds (65 percent) plan to both reside in their property themselves and also rent it out. The envisaged rental period per year sometimes even exceeds 32 weeks (24 percent). Just under a third (32 percent) intend to purchase their future property exclusively for their own private use.
Outlook: Trend towards working remotely in one’s own holiday home
In total, 41 percent of current holiday property owners stated that they also use their property for remote working. This trend was already evident prior to the pandemic and has intensified further since last year. This figure is even higher among prospective buyers. Around 64 percent plan to use their future holiday property for mobile working too. “The opportunities opened up by remote working mean that the radius of our private and working lives, in our own holiday property, is also expanding to internationally sought-after second home and holiday destinations,” says Sven Odia.
Besides the importance of a region abroad being quick and convenient to reach, international locations where purchase prices are still moderate and there are still good entry opportunities are particularly interesting for buyers. The Algarve in Portugal or the Cyclades in southern Greece, for instance, are witnessing growing demand. “Besides considerations relating to returns on investment, purchasing a holiday property is always about personal preferences too. When choosing a location, many of our clients often opt for their favourite holiday destination. In addition to holiday regions that are traditionally popular in Germany or on the Balearic Islands, this might also be on the Côte d’Azur in the south of France, on the Amalfi Coast in Italy, on the Costa del Sol in Spain or in a ski resort in Austria and Switzerland,” Sven Odia says.