Commercial insurance article archive

European Property: taking the leap amid challenging economic times

Property investors considering where next to expand their real estate portfolios could be interested to hear some European destinations are surviving the effects of the global financial downturn.

International property developer Cybarco claims a degree of resilience in the finance and property markets has seen Cyprus survive the credit crunch.

The firm's manager Jonathon P Salsbury suggests that an increasing number of Cypriots are buying second homes and the market is "entirely" not dependent on international buyers and "certainly" not the British market.

"Other buyers have moved in, coming from Russia, Kazakhstan and the Gulf states and therefore Cyprus pricing has not been affected and sales have continued," he explained.

According to the Royal Institution of Chartered Surveyors' (RICS) European Housing Review 2008, the Cypriot housing market has enjoyed the same buoyant conditions as other Mediterranean locations, which rely on tourism.

When Cyprus joined the European Union (EU) a few years ago, the country's economy and house market was given a boost, which is being reinforced by its accession to the Euro zone in 2008.

The review states that house building levels in the nation are also high and the country has the highest housebuilding rate per 1,000 populations in the EU.

It was reported earlier in the month by the RICS Global Real Estate Weekly that the nation's shock interest rate cut by the European Central Bank adds renewed support to the Cypriot economy that has coped well over the course of the first year since the start of the global credit crunch.

The Cypriot finance minister, Charilaos Stavrakis, confirmed recently that the country's banking system has been largely unharmed by the global economic turmoil due to its minimal exposure to high-risk financial methods.

Meanwhile, it is being claimed by Spain Magazine that the nation is really a "buyer's market" at the moment.

A spokesman for the publication aimed at expatriates in the country, Oliver Chandler, said: "It is ideal for people that are looking for a place to go over for the weekends, or for summer or actually to move over there because at the minute the prices are very favourable even despite the strength of the euro against the pound."

The recent Jet to Let Magazine 2008 Subscriber Survey found Spain is the third favourite destination for investors looking to buy at the moment.

According to private bank Cater Allan, more than three million people are likely to buy a property overseas within the next two years and nearly half (42 per cent) are doing so primarily as an investment opportunity.

The research suggests that 17 per cent of these people are aged over 45 years old while one in ten of 18 to 34-year-olds are also looking to invest abroad.

Cater Allan claims 2.3 million people already own a property abroad with 500,000 of these being used solely for investment purposes.

Tim Hill, author of Buying Property in Poland, is quoted by Shelteroffshore.com as saying that the Polish economy is protected to some degree protected from the financial turmoil.

He adds that billions of euros have been assigned to redeveloping the country's infrastructure and billions more of corporate investment is being poured into the nation, which is more than what is being seen in other central European countries.

"The result will be a boom, probably in the latter part of 2008. It will happen because the spring and summer buyers are hesitating due to a lack of confidence."

"As the dust settles on the credit crunch they will return to the market along with the normal autumn buyers. Six months of pent up demand will hit sellers and prices will undoubtedly rise," the report stated.

The Global Property Guide claimed last month that Albania is an attractive option for real estate investors due to its sunny climate and position on the coast of mainland Europe.

Matthew Montagu-Pollock, a publisher at the international investment firm, said the country was off the map due to its "tragic" isolation under communism and subsequent instability but is now enjoying a period of "catch up".

Emerging Market specialists Barrasford and Bird Worldwide maintains that the hundreds of millions of euros being invested in the nation in preparation for its ascension into the EU in 2014 mean the country is well positioned for property investment.

Another good location to invest are major French cities, according to property consultants VEF.

Trisha Mason, managing director of the firm, said buy-to-let properties in France's big cities are a wise move as they are attracting young professional couples and are in short supply.

Ms Mason recommends looking at renovation opportunities in one bedroom apartments in Lyon, Toulouse, Bordeaux and Montpellier.

BuyAssociation claims the Bay of Kotor is a huge property investment opportunity in Montenegro.

Paul Collins, property editor for the online advice website, said the resort has one of the largest inland seas in the world and is an "incredible attraction".

Montenegro Venture reports that the nation's property prices are much lower than other European destinations and while the country's market is relatively unexplored by the mass market, this makes it potentially "very profitable" to international property investors.

"There are real opportunities for people buying properties there," Mr Collins explained.

Andrea Marston, general manager at Investment Group Croatia, claims the nation is a place to buy for those looking for very strong growth over the course of the next ten years.

Ms Marston believes the country's property market promises long-term sustainable growth, which could yield profits of ten per cent annually for the next few years.

The Croatian Bureau of Statistics reported this month that the average price of new apartments per square metre was up by 11.9 per cent to £1,492 during the first-half of 2008 compared to the last six months of 2007.

According to the bureau, some 2.92 million visitors flocked to Croatia in this August which shows growth of four per cent compared to the same period of last year.

Those willing to take the leap during these challenging economic times might consider some of the above European destinations as somewhere to invest in.

14 Nov 2008