What Can Be Expected From European Property Investments In 2013
News Posted On: 09 April 2013
The Euro zone is currently undergoing a critical phase as several issues emerge with time. The persistent debt crisis in the continent, along with the war between currencies, and the recent signs in the economy, has signified the beginning of another recessional phase in many European countries, particularly those located around the Mediterranean Sea. With unemployment and other factors threatening to further damage the economies in Europe, the real estate market is expected to suffer in 2013. However, real estate experts in many European markets believe that the sector may in fact perform well in the months to come.
How the European Market Can Find Sustainability
Unlike its American counterpart, the European property market is safe from economic fluctuations because real estate investors have their own objectives and priorities. The approaches adopted by investors in Europe vary in context to risk management, asset class, earning returns, capital growth, etc. The financial crisis surrounding Europe, which was earlier expected to put the property sector in jeopardy, may actually help in boosting its performance. Some reports suggest that activity in most of the European real estate markets have increased steadily after the debt crisis entered the Euro zone.
In comparison with the U.S. real estate market where investors’ confidence declined significantly following the onset of the 2007 recession, European investors have shown signs of great confidence with the sector, actually increasing their confidence since 2009. There is no doubt that the kind of confidence displayed by investors of European properties is a positive sign. This shows their belief in making good returns from real estate investment although Europe has been in a neck-deep debt crisis in recent years.
Tourism Industry Benefitting the Real Estate Sector
Another factor that has been responsible for the growth of Europe’s property markets during harsh economic times is its strong tourism industry. Tourism makes up for five per cent of the entire continent’s GDP, and experts say that this figure will rise to twelve per cent in the next three years. This will be due to the increasing number of tourists who recurrently visit places in the continent. In addition, relocation and immigration is much higher in Europe when compared with North America. Hence, real estate activity remains high in a large part of the continent with considerable action taking place in the sales as well as rental market.
The presence of so many favorable factors means that Europe can have higher hopes of good real estate activity due to the endurance and continuity of the market. The countries located in the Northern part of Europe have been performing well in terms of property sales in recent times. However, experts say that Southern European nations such as Greece, Spain and Italy are not the ideal locations for real estate investment as their markets continue to decline and their economies go under recession. Meanwhile, countries like Portugal and Spain are offering free five-year residency visas to investors who purchase homes worth 500,000 Euros or more, making their markets interesting to potential investors from all across the globe.
Written by Les Calvert author of luxury French properties
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