Drinks Italy

What Are Your Summer Plans? Explore Outbound Opportunities & Capitalize on the Strength of the US dollar

What Are Your Summer Plans?

 Explore Outbound Opportunities &

Capitalize on the Strength of the US dollar

 Drinks Italy

After years of decline and stagnation, the US dollar has gained momentum over the past year.  The dollar is up 25.5% against the euro, 20.8% against the Japanese yen, and 9.5% against the British pound. As a global real estate professional, what does this mean for you?  Now may be a great time to plan a more-affordable European vacation. Imagine sipping limoncello while watching the sun set over the Amalfi Coast. Sounds good, right? But before you pack your bags, there’s something else to consider─ now may also be a good time to increase your earning potential by capitalizing on outbound international business.

Impact of the US Dollar Overseas

The robust US dollar coupled with depressed asset prices throughout many markets around the world, creates opportunity for US investors looking to purchase property outside the United States. CNN reports, “More Americans are taking the leap to buy that overseas pied-a-terre they’ve been thinking about.” In particular, a number of destinations in Europe offer substantial bang for your buck.  According to the global real estate consultancy, Knight Frank Property, prices in some European markets fell 40-50% during the financial crisis, and they have not yet fully recovered.   Low property prices and the current strength of the US dollar means that American investors will find that their cash can buy much more than it did this time last year.

For example, if an investor had US $400,000 to spend on a property last spring, he would have been looking at properties listed at €293,000. However, a year later, US $400,000 equates to €363,835─ a difference of over €70,000![1]

The Euro is not the only currency affected substantially by the current strength of the US dollar. Take a look at the below chart which illustrates the fluctuation, from this year and last, between the US dollar and a number of world currencies.  It’s apparent that American investors looking to find good deals overseas have many destinations to consider.

 

Currency

June 1, 2014

June 1, 2015

Difference

Australian dollar

US $400,000 =

AUD $ 429,558

US $400,000 =

AUD $ 522,725

AUD $93,167

Brazilian real

US $400,000 =

BRL $895,480

US $400,000 =

BRL $ 1,270,320

BRL $374,840

British pound

US $400,000 =

GBP £ 238,625

US $400,000 =

GBP £261,378

GBP £22,753

Canadian dollar

US $400,000 =

CAD $433,664

US $400,000 =

CAD $497,908

CAD $64,244

Euro

US $400,100 =

EUR €293,000 =

US $400,100 =

EUR €363,835 =

EUR €70,835

Japanese yen

US $400,000 =

JPY ¥40,667,600

US $400,000 =

JPY ¥ 49,643,600

JPY ¥ 8,976000

Mexican peso

US $400,000 =

MXN ₱ 5,140,920

US $400,000 =

MXN ₱6,149,680

MXN ₱1008760

 

Not all countries have been impacted by the US dollar’s recent rise. Countries whose currencies have remained strong include Costa Rica and China. Additionally, countries that peg their currency to the US dollar– such as Panama, Ecuador, and a number of countries in the Caribbean, would not be affected.

Currencies fluctuate daily, but many economists believe the strength of the US dollar won’t change any time soon.  CNN reports that “America’s economy certainly won’t stop the dollar’s surge. The job market is on a tear, growth is picking up and the Federal Reserve is likely to raise its key interest rate this year for the first time in almost a decade.  At the same time, Europe’s new stimulus program is lowering interest rates across the pond. It’s a recipe for the dollar to gain even more value this year “.

 

The Importance of a Global Network

Over the last couple of years, many agents have focused their global business on international buyers purchasing property in United States.  While the US is likely to remain a desirable location- even though the dollar’s strength makes it more expensive for many international investors, now is a great time to also explore outbound opportunities.  Having access to an international network is essential to growing overseas referral potential and if you have not already done so, now is the time to explore resources available to you through NAR’s international networks.

Certified International Property Specialists (CIPS) Designation
NAR’s  Certified International Property Specialists (CIPS) designation is a great resource if you are looking to expand your global reach.  After you complete the CIPS coursework and apply for the designation, you become part of the CIPS referral network, comprised of over 2,800 agents from 50 different countries.  Designees are profiled in the CIPS directory where consumers and other agents can search to find experienced international practitioners.  Additionally, CIPS designees are invited to join a private Facebook group where agents network and exchange referrals.  These can be extraordinary tools to help you grow your business, both inbound and outbound.

The CIPS referral networks will serve you well if you are willing to do the legwork.  For example, if you work in a market, such as Chicago, where many residents become snowbirds in the winter months, use the CIPS directory and Facebook group to network with designees based in Mexico.  Introduce yourself, build a rapport, and partner with Mexico based designees to co-market their listings to your clients.  As a CIPS designee, you can take advantage of the CIPS Referral Contract Form ensuring transparency in the transaction so you know that all parties are on the same page.  Also, don’t forget to market your global expertise to your US based clients.  Let them know that now is the time to explore opportunities abroad, and you have the international network to assist them.

(End note: Once you have successfully grown your outbound business, don’t forget to reward yourself.  After all, now is the perfect time to book a flight, pack your bags, sip limoncello and watch the sun set over the Amalfi Coast.)


[1] Conversions provided  by Oanada.com reporting 1 June 2014 & 1 June 2015

 

Katie Stouffs Grimes

Katie Stouffs Grimes (CIPS, GREEN) is the Managing Director of Global Alliances, Communications, Marketing and Business Development for the National Association of REALTORS® Commercial & Global Services division. She can be reached at kstouffs@realtors.org.

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