Around Europe with Choices Today

Wednesday 8th May 2013

Choices Today offers a brief snapshot of some of the most popular property markets in Europe.

Housing market conditions across much of Europe have been sluggish in recent years, as no country has escaped unscathed from the Eurozone crisis, although the scale of the impact varies from country to country. While there remains much economic uncertainty, the price falls recorded across parts of Europe does present a potentially good opportunity for property investors. Here is a summary:

Consumer confidence in the housing market in France is low, due in part to the country’s fragile economy, which ended 2012 on a weak note. This is reflected in a fall in the number of new homes being developed in the country. According to data released by the housing ministry, the number of homes under construction fell by 30.1% in the fourth quarter of 2012, while permits dropped by 24.8%, whereas they had not given up more than 1.9% in any of the preceding three quarters. FNAIM, the national association of French estate agents, report that property prices have fallen of late across many parts of the country, with further declines anticipated.

The property market in Portugal will remain very weak. Oversupply of properties is not a problem – its poor levels of demand. With unemployment soaring, this is unlikely to change. Brits will continue to be attracted to the Algarve, but will expect price reductions, something that many established developers in the Golden Triangle are not prepared to offer – resulting in stalemate and low level of transactions. Rightmove Overseas saw a 105% month-on-month rise in the number of searches for properties in Madeira in March.

Spain’s popularity has dipped in recent years, following a string of woes; property scandals, corruption, a stringent oversupply of homes, dodgy legislation, such as Valencia’s ‘land grab’ law. However, the country’s distressed market has created some great bargain opportunities, with significant price reductions being made. Prices have fallen by around 45%. Savills believe that Spanish property prices are near the bottom of the downturn, but market analysts at Goldman Sachs are projecting a further 10% price decline. The reality is that the market crash is far from over, with values still overvalued.

Property in Bulgaria has enjoyed a strong start to the year, with sales increasing in Q1 2013. Data from the Bulgarian National Statistics Agency, relayed by Postbank, showed transactions soared by 23% in the first three months of this year, compared to the same period in 2012. Total units sold ended the quarter at 44,174, Standart reported. This is a significant increase from 35,821 units transacted during the same time last year.

Property prices have been rising across parts of Scandinavia, led by Norway, the world’s third largest exporter of oil, which may now be in a housing bubble, according to Robert Shiller, the co-creator of the S&P/Case-Shiller home price index.

Property in Switzerland is holding up well, particularly at the luxury end of the market, buoyed by the country’s decision to open its doors to ‘residence de tourisme’ style investments, making it easier for foreigners to purchase properties. Prices have generally edged upwards.

Croatia’s property market remains most active in the Istrian peninsula – the so-called ‘new Tuscany’ – while the southern Dubrovnik region remains the most desirable place to own property. The country has real hopes of joining the EU and NATO over the next few years and is regaining a reputation as a desirable holiday destination.

Following several years of robust capital growth, property prices across much of the Baltic States underwent severe price corrections between 2008 and 2012. Over the past year, property prices have stabalised in Estonia and Lithuania, while the major price falls in Latvia, which experienced the greatest slump, also appears to be over.

Turkey is now of the world’s most popular (and affordable) places for Brits’ to visit, and buy property, due to sterling’s strength against the Turkish lira. The country’s popularity as a holiday home destination continues to swell. The best prospects for capital growth are in the capital of Istanbul.


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