Ooh la la! Or sacre bleu? The pitfalls of buying your European dream home

Ooh la la … a 17th-century stone chateau on the river in southern France with eight bedrooms and seven hectares of land for €735,000. Que bueno … a three-bedroom chalet in Spain’s Catalonia for €250,000.

Or how about a 16th-century Benedictine convent in the heart of the Dao wine region in Portugal at €925,000, or a medieval castle in County Clare, Ireland, a snip at just €95,000?

Such fabulous homes. Such bargains. Such temptation.

Unconventional European assets can look incredibly seductive to Australian investors, but the risks can be repellent.

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“When you look at the prices of some of these places in Europe, particularly compared to Australian property, they look pretty affordable,” says Nerida Conisbee, Ray White chief economist. “But there are a lot of regulations around buying overseas and tax implications, and while financing can be straightforward here, it often isn’t elsewhere.

“You also have to understand the local market and there can be a lot of strict planning rules around renovations and problems with restoring old property. If you’re looking at it as an investment, will it really generate a rental return and what are locals’ attitude to foreign investors? There can be a lot of pushback.”

While Australian investment in Europe has grown significantly, with over $260 billion in combined investments in the UK and EU as of mid-2025, according to figures from the Department of Foreign Affairs and Trade, very little of that is in privately purchased property.

“For individuals thinking of buying, maybe you can get lucky,” says Conisbee. “But that’s rarely the reality. We’ve all seen those occasional grand properties for sale at the nominal $1, but they’re often in places no one wants to live and in terrible condition.”

Expert property negotiator Scott Aggett has bought a couple of times in London, and those properties served him well. But generally, he says, prices may be low, but the cost of renovating and then maintaining large heritage homes on extensive land holdings can prove ruinous.

“They can be a long way from any shops or big towns, and so the lifestyle they offer might be very different from the one you fondly envisage,” Aggett says. “Also, they can be far from tourist destinations, so there’s a very small group of potential renters, and there might be limitations on Airbnb lettings.

“In addition, there can be difficulties with visas, taxation arrangements, financing, and even language. It might look like a good holiday home, but it might not be in a location that’ll work for you. You always need experts to guide you and managing a property from 15,000 kilometres away can be very difficult, not to mention changes in exchange rates of currencies.”

Certainly, some of these magnificent piles can make wonderful holiday escapes for high-net-worth individuals, advises Buyers Collective founder Jack Freestone, but exit strategies can be challenging with a very small pool of resale buyers.

“It can be a unique holiday home play, but most people would be better off investing in a country with strong fundamentals,” he says. “We are very bullish on the Australian property market and would only consider buying properties we can see and inspect in person.”