Abandoned Spanish villages now cheaper to buy, as euro weakens in 2019
20.11.2019
Peter Lavelle at E-Money Institution Pure FX
Do you intend to club together with your family or a group of friends, to buy an abandoned Spanish village (“aldea abandonada española”) this year or next? This could be an excellent place to retire, away from the hustle and bustle of the city, or a fantastic private holiday destination, for just you and your nearest and dearest.
For example, you might have in mind to buy a beautiful 2-hectare hamlet away from neighbours, close to the coast, and surrounded by nature, in Lugo, in Spain’s most North-Western region, Galicia.
Alternatively, you could have your eye on a village with six buildings, a swimming pool, gardens and internet connection, in Cáceres, in Spain’s Western region Extremadura, at the border with Portugal. Whichever abandoned Spanish villa you have in mind, it’s an outstanding opportunity for peace and quiet, to retire or for exclusive holidays. Foreigners Buying Abandoned Spanish Villages Must Exchange Currencies First
Of course, if you’re a foreigner buying an abandoned Spanish village, before you take possession of the deed to the land and its properties, you’ll have to transfer money to your Spanish bank account first, into euros.
In this case, it may interest you to know what’s happened to the euro on the interbank foreign exchange market so far in 2019, and what factors may influence the euro next year, versus currencies like the pound or US dollar. After all, when the euro weakens versus its currency counterparts, this can increase your total budget, when you transfer money to Spain to buy an abandoned Spanish village.
In turn, this could enable you to buy a larger “aldea abandonada” than you’d originally had in mind, or help you to pay for the legal costs and administrative fees. So let’s see what’s happened to the value of the euro in 2019, and what factors may be relevant, in 2020.
UK Pound Rises 5.83% Versus Euro So Far in 2019, to Your Advantage
For Brits buying an abandoned Spanish village this year or next, it may interest you to know that the pound to euro interbank exchange rate stands at 1.1734 in mid-November.
By comparison, back on January 1st 2019, British sterling was as weak as 1.1087 versus the Eurozone’s “common currency”. So it’s since strengthened by over 6.5 cents, or by 5.83%. Moreover, this 1.1734 is a six-month high, the pound’s strongest versus the euro since May 6th.
As a result, were you transfer money to Spain, you might get a higher euro total than any point in the last six months. In turn, this could increase your budget in euros, to make buying your abandoned Spanish village a reality.
US Dollar Gains 3.95% Against Euro To Date This Year, Lifting Your Budget
Similarly, the US dollar to euro interbank exchange rate stands at 0.9048 in mid-November. This is 3.5 cents or 3.95% higher than at the start of this year, when the so-called “greenback” was at just 0.8704 versus the euro.
In turn, if you’re an American thinking of retiring in Spain with your very own hamlet, or you’re buying a village with your family and friends to have an exclusive, private holiday destination, this may increase your budget.
Euro Weakens in 2019, as ECB Interest Rates Remain at 0.0%, All-Time Low
The euro has weakened on the interbank market versus other major currencies in 2019, in part because the European Central Bank’s (ECB) interest rates currently stand at 0.0%, an all-time low.
By comparison, UK interest rates are at 0.75%, while US interest rates reside at 1.5%-1.75%, thereby strengthening both the pound sterling and US dollar versus its Eurozone counterpart.
However, because a weak euro increases your budget when you transfer money to Spain, this is to your advantage. In addition, if you’re taking out a Spanish mortgage to buy an abandoned village on the Iberian peninsula, the ECB’s low interest rates may reduce your mortgage repayments. So this is another advantage to keep in mind.
Euro Exchange Rate May Be Affected in 2020, by UK Government, US Economy
Meanwhile, looking to 2020, there’s a range of factors that may affect the euro interbank exchange rate.
For example, at the moment the financial markets are hopeful that there’ll be a stable, majority government in the UK, after next December 12th’s general election. In these circumstances, there might be clarity about the UK’s future economic and political direction, which may influence sterling’s value versus the euro, for Brits buying an abandoned Spanish village.
Turning to the United States, the comparatively robust American economy could affect the US dollar, if you’re a US citizen buying an abandoned Spanish village in the foreseeable future. So these too are potential advantages to be aware of.
Please note that the exchange rates within this article are interbank rates and are for indicative purposes only, and are not trading levels which E-Money Institution Pure FX offer. For live trading levels contact one of our currency brokers on +44 (0) 1494 671800.
This article does not constitute advice to any person on any matter and it is not intended as a recommendation to trade. Pure FX makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to any loss arising from actions taken as a result of acting on this information.
