Always dreamed of a villa overlooking the Mediterranean? The European debt crisis is fueling a decline in home prices in many popular locations for second homes. Recent austerity measures adopted by Spain, Portugal and Greece, along with a glut of new homes built during boom times, has led to a drop in prices of 15 percent to 30 percent, according to the Wall Street Journal.
Examples of slashed prices include a 57-percent reduction on a two-story mansion near the ocean in Portugal that includes a sauna, gym and pool. The original price of $3 million has been reduced to $1.3 million. In Corfu, a 5,382-square-foot villa has been reduced from $2.8 million to $1.8 million.
But buying property overseas can be a minefield of legal entanglements, extra fees and bureaucracy for foreigners. Financing is often difficult to obtain and interest rates have risen. Nevertheless, buyers seem undaunted. One British broker reported an increase of 32 percent in the number of clients buying European properties from March through May this year compared with the same period last year.
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