BIn recent years, the concept of “coolcationing” has gained significant traction, emerging as a one of the top travel trends in 2024, with the potential to reshape the landscape of luxury real estate investments in the near future.
This phenomenon, which is characterized by travelling to cooler climates rather than the traditional sun, sea, and sand destinations, is redirecting the focus of real estate investors from subtropical destinations to countries like Iceland, Finland, Norway, Latvia, and Estonia.
These locations, often overlooked in favor of warmer locales, are now at the forefront of an evolving travel and property investment trend.
The Rise of Coolcationing
Traditionally, summer vacations have been synonymous with sun-seeking adventures in hot climates. However, the intense heatwaves of recent years have led to a shift in traveler preferences. For example 2023, the hottest year on record, saw a surge in the popularity of “coolcations” — potentially due to those in search of more moderate weather to escape the heat of their home country, or because when the time came for a vacation, the craving for heat was no longer present.
This trend is not just a fleeting phenomenon; a survey by the luxury travel network Virtuoso found that 82% of its clients are considering cooler destinations for their 2024 travels. According to Intrepid Travel, places like Iceland, Finland, and Scotland, along with the rising star Latvia, are gaining prominence for their unique blend of natural beauty as well as more temperate climates.
The appeal of cooler temperatures extends to family travel as well. Destinations offering summer sunshine without the oppressive heat of Mediterranean beach resorts are increasingly sought after by families looking to make more of their getaway.
Activities like kayaking in Norway’s midnight sun or hiking through the lesser-known trails of Slovenia are becoming popular choices for summer holiday vacations, combining adventure with comfortable climates.
Real Estate Market Trends
This shift in travel preferences is having a profound impact on the luxury real estate market. There has been a noticeable increase in the demand for high-end properties in cooler climate zones like Lapland and The Arctic Circle.
In 2023, a property in Iceland emerged as the second most viewed listing on JamesEdition, following a villa in the French Riviera, signaling a growing interest in luxury real estate in these cooler regions.
In the Nordic region, luxury homes in Iceland are entering the market with prices ranging from $650,000 to $2,500,000. Finland, Norway, and Sweden are also seeing a rise in the luxury real estate market, with homes for sale priced up to $10.9 million, highlighting the diverse range of high-end properties available in these areas.
The Baltic countries are not far behind in this trend. Estonia, and Lithuania are experiencing a surge in the luxury property market, with homes for sale averaging around $1 million and peaking at over $16 million in Latvia. These figures underscore the increasing appeal of cooler climates for high-net-worth individuals seeking ahead-of-the-curve luxury real estate investments in up-and-coming locations.
Implications for Investors
For real estate investors, this trend presents a unique opportunity. As travel preferences lean towards cooler destinations, the demand for luxury accommodations in these regions is expected to rise.
Investing in properties in Nordic and Baltic countries could offer significant returns, especially considering the growing interest in renting high-end properties in these locations.
The coolcationing trend is more than just a passing trend. It’s a shift in traveller behavior that signals the changing priorities among visitors and property investors alike. As the world adapts to climate change and seeks out new experiences, cooler climates are becoming hotspots for luxury travel and real estate investment.
This emerging market offers exciting opportunities for discerning investors looking to capitalize on the unique blend of natural beauty, temperate climates, and growing demand for high-end properties in these regions.