Cross-border
Currency in Cross-Border Real Estate — A Practical Framework
When you buy property in another currency, you are taking two trades — a property trade and a currency trade. This is how to think about both at once.
A USD-based family buying a €5M finca in Mallorca is taking two distinct trades. They are taking a position in Mallorcan real estate, and they are taking a long EUR / short USD position of €5M. Both should be conscious. Both should be priced. Most foreign buyers think carefully about the first and never frame the second.
The two ways to manage currency
- Borrow in the local currency — finance the EUR property with EUR debt. The mortgage hedges the currency exposure on the financed portion; only the equity is exposed.
- Match liabilities to assets — if the family has ongoing EUR expenses (school in Switzerland, time in Mallorca), the EUR asset is partially self-hedged by the family's EUR consumption.
What we almost never recommend is a derivatives hedge on the full property value. The hold horizon is too long, the roll costs are real, and the family's true exposure is rarely the gross asset value.
The 30-30-30 frame
For a globally mobile family, a rough default we discuss is a balanced 30-30-30 exposure across USD, EUR, and JPY — with the remaining 10% in the family's home currency for liquidity. This is not a recommendation; it is a starting point for the conversation. Most families end up with more weighting toward whichever currency funds their largest ongoing expenses.
About the author
Shibui Research is the editorial desk of Shibui Collective, covering private real estate for cross-border family capital. Our team has structured and operated more than $1.2B of value-add and core-plus real estate across Europe, the Americas, and Asia over the past fifteen years.