In the wake of the global pandemic, there has been a noticeable heightening of demand for affordable second homes, driven by shifting lifestyles and the newfound flexibility of remote work, and Mauritius ticks many boxes for those investors. However, amidst the allure of luxury, the question of affordability looms large. Wealthy homeowners want value for money too. So, how does one reconcile indulgence with prudent investment?

A recent study compared cost-effectiveness among countries for UK investors seeking luxury waterfront second homes in their desired destinations. The researchers selected the most popular countries by Google search volumes to ensure their findings were not only data-driven but also aligned with current market interests. In addition, they chose various affordability metrics, encompassing everything from property prices to dining expenses, to offer a comprehensive assessment of value for money in the luxury segment.

5 drivers behind resurgence of luxury second homes

In the aftermath of a period of global uncertainty, the appeal of luxury second homes has experienced a remarkable resurgence. But what factors are driving this renewed interest? For many, the pandemic has reshaped priorities, highlighting the importance of comfort, space, and a change of scenery. With an increasing number of individuals embracing remote work, the dream of waking up in a luxurious setting, far removed from the urban hustle and bustle, has become a tangible reality. Key drivers behind the surge in demand include:

1. Pandemic effect: Greater emphasis on spacious living areas, natural light, and outdoor spaces as people spend more time indoors.
2. Remote work: The shift towards remote work has diminished the necessity of proximity to the workplace, opening up new possibilities for location-independent living.
3. Luxury factor: Growing demand for homes equipped with premium amenities such as outdoor spaces, swimming pools, and scenic vistas.
4. Investment opportunity: Luxury properties are perceived as long-term investments, particularly appealing in the current low-interest-rate environment.
5. Location appeal: Properties situated near natural attractions such as national parks, mountain ranges, and beaches are highly sought after, as are areas offering a high quality of life.

Mauritius commands attention

For the study, “luxury property” means a three-bedroom waterfront residence listed on a luxury real estate platform, with waterfront encompassing properties overlooking the sea, a lake, or a river.

Mauritius ranked third behind Ireland and Cyprus with an affordability score of 8.9 compared to 9.3 for Cyprus, an island in the eastern Mediterranean Sea and 10.0 for Ireland, Europe’s second-largest island after Great Britain.

While the average property price in Mauritius is slightly higher at £539,299, favourable property tax rates and reasonable luxury amenity costs help offset this. Dining at premier restaurants averages a modest £63, promising luxury without exorbitance. The climate is temperate year-round, potentially dipping to 19°C in August, but during the UK’s winter months, temperatures soar to highs of 34°C, making it an ideal winter sun destination.

Metrics and affordability ranking

This study aimed to objectively determine the affordability of various destinations for prospective investors. Rather than relying on subjective assessments, robust data was utilised to compute an affordability score for each country. The metrics considered included:

• Average property prices: Analysing prices of luxury waterfront three-bedroom properties to gauge initial investment requirements.
• Price per square foot: Offering a comparative perspective on property value.
• Airbnb revenue: Factoring potential earnings from seasonal property rentals.
• Flight prices from the UK: Evaluating accessibility based on average flight costs from the UK during peak travel months.
• Dining costs: Using the price of tasting menus at fine dining establishments as a proxy for luxury living expenses.
• Luxury car hire rates: Considering daily rental costs for premium vehicles to reflect transportation expenses.
• Property taxes: Evaluating countries based on their property tax regimes, with lower tax burdens receiving higher scores.

To ensure relevance to investors, a weighting system was implemented, with property prices given three times the significance of other metrics due to their direct impact on initial investment outlay. This comprehensive approach aims to equip investors with the necessary insights for making informed decisions.

There are so many more reasons to move to Mauritius and several ways to do it, whether you plan to try it out for a year via a Premium Travel Visa valid for a year or an investment, retirement or occupation visa if you have a long-term view. Contact the 2Futures team to get advice on logistics of the move, recommend professional people and services to smooth the process, and offer solutions for luxury second home rentals or investment.