Which locations are the best buy for real estate on a strong dollar?

The real estate market attracts hundreds of thousands of investors every year and the U.S. dollar is the most popular currency used to buy and evaluate real estate globally.

In recent years, the U.S. dollar has gained considerably against the euro and the British pound, which means that U.S. real estate investors have an advantage when it comes to buying holiday homes or investment properties abroad.

Axiory.com shows exactly how the USD has performed, which paints a clearer picture of the rise of U.S. capital pouring into overseas real estate markets. 

But where do American investors typically buy properties and should you also follow the same strategy? - We can look at five of the most popular real estate markets for U.S. real estate investors and what makes them so appealing in the first place. 

Italy - Tuscany and the Amalfi Coast

Italy has long been a favorable destination for overseas real estate investors - with a lot of scenery and beautiful historic properties dotted around the country.

However, the recent underperformance of the euro against the dollar has meant that U.S. investors are buying up a lot of properties in the country - both as second homes, or as holiday rentals on Airbnb.

The EUR/USD rate stands at 1.089, which makes properties across most of the Eurozone quite attractive for dollar investors.

However, another major reason for the high demand for Italian properties, especially in the wine region of Tuscany and the beautiful Amalfi Coast in Campania, is the advanced aging of the country’s population, which has left a lot of historic properties abandoned or selling at a massive discount. For this reason, many investors buy old properties at a discounted price and renovate them, as the full costs still make these properties quite affordable. However, the Tuscany market has been booming and affordable prices may not last much longer. 

Spain - Barcelona and Mallorca

Spain’s real estate residency program, coupled with a weakening euro, have made Spain one of the hottest real estate markets in Europe.

The city of Barcelona, as well as the island of Mallorca, have become two of the most demanded destinations for second home owners and holiday rental investors from the U.S.

While the Barcelona property market is not considered to be cheap, Mallorca has emerged as a great alternative for island living enthusiasts, away from the bustling crowds of Ibiza. 

Barcelona has long been a cultural melting pot and a strong dollar means that properties in this city are now more attractive to those with the sufficient means to buy a house on the outskirts, or an apartment closer to the city center. 

Malaysia - Kuala Lumpur

Malaysia is one of the fastest-growing economies in the world, with plans to tap into value-added industries, such as chip manufacturing.

What does this have to do with real estate you may ask? - Simple, the capital city of Kuala Lumpur, which already attracts plenty of expats to the country, is likely to gain an edge due to rising property prices in the near future, while the exchange rate between the U.S. dollar and the Malaysian ringgit has shifted in the favor of the USD. 

These two factors - a growing Malaysian economy and a strengthening USD, could be the recipe for some exciting real estate prospects in the city of Kuala Lumpur. 

Turkey - Istanbul

It has been no secret that the Turkish lira has been in freefall for the past few years, with 1 USD now being able to buy almost 33 liras. This steep drop of TRY has meant that the local real estate has failed to keep up with the rapidly changing rates - making room for some attractive deals in the country.

Istanbul is the undoubted top 1 destination for real estate investors in the country and while prices are not as cheap as a few years ago, the buying power of the USD allows for some amazing deals.

The average price of a square meter of property in Istanbul is equivalent to 33,731 Turkish lira, which translates to little over $1,000 per square meter in USD, which is a very attractive price in a diverse city with lots to do. 

Mexico - Cancun and Tulum

When discussing real estate booms caused by changes in the foreign exchange market, the dynamic between the U.S dollar and the Mexican peso cannot be understated.

As a neighboring country with plenty of vacation spots, Mexico has always been an attractive market for holiday home buyers in America, but a strong dollar has shifted the tides massively in the favor of dollar buyers. 

One USD now buys almost 18 Mexican pesos, which means that the already quite affordable Mexican property market has now become even more inviting.

The resort cities of Cancun and Tulum, both located on the Yucatan peninsula, are two of the hottest property markets in Mexico in 2024 and this trend is unlikely to slow down much in the coming few years. 

Summary

The strengthening of the U.S. dollar has turned out to be a massive advantage for real estate investors. As the value of millions or properties worldwide is already measured in USD, favorable conditions in multiple countries around the world make buying real estate with the dollar especially favorable.

While the future dynamics of the foreign exchange and real estate markets are uncertain, a strong dollar is always an indication of attractive properties in countries whose currencies are falling against the USD.