The rebound in most European property markets is ongoing, but uncertainty remains. This is the summary of the current situation according to a recent report «European Housing Review» of RICS (Royal Institution of Chartered Surveyors).
Buying residential property in Belgium, France, Germany and the Scandinavian countries showed an increase in prices during 2010, while other markets continue to face problems. Ireland, Hungary and Cyprus have dropped significantly, while the United Kingdom, Netherlands, Poland and Italy, prices fell slightly. In Spain, Greece and Portugal, the fall in prices last year, despite their financial troubles, was quite limited and the Baltic states have shown a slight recovery.
According to Mr. Paul Loizou MRICS, Board member of RICS Cyprus: The Cyprus property market continued to slow in 2010. The Property Price Index of RICS showed that in 2010 the price of apartments fell by 10.8% and prices of homes 7.4%. Also, transactions have fallen drastically, especially considering that the presence of foreign buyers has fallen sharply by 80% and there is little interest in properties in secondary areas. However, there is little prospect of an upturn in trade, but not in prices, in 2011. ”
Although most European markets out of crisis, the survey shows that the future of European real estate is still uncertain and full recovery will depend on many different factors. Unlike the previous upward trend in real estate across Europe, the cost of materials for housing construction and sales are still low. Many countries still face significant restrictions on mortgage loans while interest rates remained generally low in 2010, markets are very sensitive to fluctuations in interest rates.
According to the author of the study, Professor Michael Ball, «A full recovery will not occur until the property markets are fully operational again. This will be done only with the resumption of supply of mortgage loans, revitalizing the manufacturing sector, and increased turnover in all relevant sectors of the economy. However, the housing sector in Europe is far from being followed by long-term stagnation facing the U.S.. ”