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The weakest real estate markets in Europe

Posted on October 4, 2012 · Posted in Chris Mansfield - Blog

The Euro investment offering today

Europe is undoubtedly a severely effected market in particular due to the Eurozone crisis with the inflated strength of the Euro which affected tourism.

Which are the most affected areas in Europe, and how does that relate to overseas property investment?

Well there’s no surprises here:

The plight of major European countries

Europe Map

Image by Cea. via Flickr

The weakest real estate market in the world was Ireland as the country’s residential property index fell by 16.85 per cent year-on-year in the second quarter of 2012, and plunged 2.91 per cent in the third quarter of 2012. Mortgage lending was weak in the country, and the volumes of transactions were low.The following 8 weakest real estate markets on the planet were all in the European continent, including the Netherlands which saw a drop of 10.12 per cent during the year to the second quarter of 2012, Spain with a 13.18 per cent fall, Greece plunging 11.92 per cent, Poland by 8.19 per cent, Cyprus by 7.68 per cent, Portugal by 10.95 per cent, Sweden by 4.18 per cent and Slovakia with a 5.61 per cent drop. All the countries except Slovakia experienced bigger drops in house prices this year as compared to 2011.

The other countries in Europe that saw reasonable year-on-year falls in house prices to the second quarter of 2012 included the UK with a 3.42 per cent drop, Bulgaria with 3.87 per cent, Romania with 2.71 per cent, Lithuania with 3.07 per cent, Russia with 2.08 per cent, Finland with 2.22 per cent and Romania with 2.71 per cent.

The countries that enjoyed a rise in house prices included Germany whose real estate prices rose by 5.24 per cent – a fantastic improvement from its decline during the second quarter of 2012 of 0.65 per cent, Norway, whose prices were up to 6.26 per cent year-on-year, Switzerland with a 4.86 per cent rise, Estonia with 2.82 per cent, Latvia with 2.5 per cent, Iceland with 1.72 per cent and Turkey with 2.57 per cent. Read more at propertyabroad.com.

The double edged sword of weak market investing.

Investing in weak markets can be very fortuitous to an investor who knows which markets have more future potential, but it can also be a way to trap your wealth in an underperforming area.

To find out our favourite markets and more specifically the products we have picked which we believe hold the most future potential, see our investment range or get in touch with us for a free, specialist consultancy in overseas property investment.