Property Investors Looking At Different European Markets For Investments

After the 2008 financial crisis, the European Central Bank and the Bank of England, pushed interest rates to historic lows so that real estate will be more attractive to investors who are frustrated with the tiny yields in the bond market. London became one of the easy favorites along with Paris and Germany. However, years of strong real estate demand have pushed the property values up and investors are looking at other locations for an increased return on their investment.

The UK led the decline because investors were rather cautious before and after the Brexit. Germany and France also faced significant declines because these prime markets of Europe are fully priced due to the strong demand in the past years. In other countries like Spain, Poland, the Netherlands and Sweden, investment was up from last year’s levels.

In the United Kingdom, investment in commercial property dropped by 47%, in Germany by 35% and in France by 32%. On the other hand, investments in Poland increased by 20%, in the Netherlands and Sweden by 9% and in Spain by 6%. Those with smaller economies like Austria and Ireland offer more opportunities for bit-ticket properties and portfolios for real estate holdings.

Even before the EU referendum, investors were already pulling back from London because of they were rather cautious about the results and the property prices in London have become too expensive. During the first half of the year, the only property sector where prices have remained stable was offices in Central London.

However, the drop in demand for London’s commercial real estate is less than what experts feared. The market is still being supported by demand from foreign investors who intend to take advantage of the low value of the pound. Investors from Asia and the Middle East are at the forefront of investments.

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