Dollar-Euro Reach Parity for the First Time in 20 Years: What Does This Mean For Buyers?
On the 12th July, for the first time in two decades, we saw the euro hit parity with the US dollar. For a few hours, the one-to-one exchange rate saw the euro and dollar being worth the same amount, with the euro even teetering just below this briefly.
Despite making a slight recovery, this is still the strongest the dollar has been against the euro in quite some time, meaning for those coming to Europe from the US, and for those who receive income in dollars, it’s a great opportunity to invest.
The last time we saw the euro and dollar worth an equal amount, in 2002, there were concerns about the stability of the European currency and whether the euro was at risk of falling apart, something that is not a threat at this time. Currencies across the globe have also taken a hit against the dollar.
It is important to note that this time the reasons for this drop in value against the dollar is mostly due to a combination of external factors: the proximity to the war in Ukraine, the historically heavy reliance on Russian energy, and the slower economic recovery from the pandemic compared to the US.
Taking Advantage of the “Dollar Discount”
The current strength of the US dollar means your dollars will go further than they did a year ago. At this time in 2021, a property worth €300,000 would have cost you around $366,000, whereas as of today a €300,000 property would set you back around $307,000. This is a highly significant difference and could allow those looking to buy from the US to access a wider range of properties than they would have been able to, just a short time ago.
If you’re considering a move to Portugal, or Europe in general, from the US and would still be receiving income in dollars, either by remote work, investments, or rental income, then your day to day spending money would also stretch further than before.
The Perfect Time For a Scouting Trip?
This is also a great time to make the trip over to Europe to do some property scouting, even if you’re not quite ready to buy. With the favourable exchange rate for those from the US, travel around Portugal and the EU will be much cheaper comparatively than it was this time a year ago, giving you a fantastic opportunity to explore different parts of the country at a more leisurely pace.
Purchasing property is a great way to diversify your assets, and despite some instability in the value of euro and other currencies across the globe against the US dollar, the real estate market in Portugal remains strong. There is still a large amount of demand from national and international buyers for property, and this demand greatly exceeds the current level of supply, leaving a decent amount of room for growth. This demand is also unlikely to slow at any time in the near future.