The European Real Estate Portal

Established versus Emerging Markets - the Case for Europe

by Yuri Brixenmortar 28. January 2011 11:54


Louise Reynolds of UK-based property investment firm Property Venture had some interesting things to say yesterday when it came to potential market investment for 2011. Namely, whether those looking to invest in real estate in the coming year should go with established markets the PIGS (Portugal, Italy, Greece and Spain) or emerging markets the BRICs (Brazil, Russia, India and China). Obviously, investment in the traditional European summer vacation hot spots (ie the PIGS) has been a favourite with property buyers over the years. But with oversaturation of the market and continuing financial woes for the Eurozone, is there anything left in these markets for 2011?

Experts have predicted a modest 1.3% economic growth across Europe in the coming year, as opposed to a 6.5% increase amongst these four BRICs economies previously mentioned. It's obvious that from a short-term point of view, these markets are where it's at. Yet property, being generally a more conservative long-term investment, generally requires looking further into the future. Investors in the Dubai real estate industry will attest to this. Whilst property values in this absurdly affluent area of the UAE skyrocketed as it experienced unprecedented economic growth in the second half of the last decade, the bursting of the property bubble due to oversupply has now caused the market to slip into a decline almost as steep as the double-figure growth it once experienced.

As a tested market that has endured with investors, Reynolds, in her PIGS-versus-BRICs comparison, attests that despite the somewhat deceptive figures, European property still may be the way to go when it comes to investment. "On the face of it, the emerging economies look a better bet, however they will need resources to grow, both money and raw materials (witness the spate of lead thefts to supply China with base metal requirements). Some emerging markets have not yet got a proven, 'foreign property buyer' track record. Sustainability of the domestic, property markets will also be a key question to bear in mind, as well as how foreign property buyers are treated by regulation."

Despite the lack of current 'boom' in the Euro market, therefore, investments in property in the key European destinations like Portugal and Italy can still represent a good future nest egg, provided they have the ability to recover in the medium term. To search for your own European investment opportunity, check out Eurobrix's main listings page and click on 'investment property'.

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09/02/2011 10:55:22 #

Hi there, I read your article with interest. The property slump in the market has affected Europe,  it goes back to looking at property investment for the long term, and I think Europe will bounce back and become a buoyant market once the recession and the Euro countries in trouble now get on their feet again. As you say, good properties in popular areas will maintain their value in the long term.

Certainly in the UK, affordable home sales are rising, by around 10,000 in 2010 compared to 2009, so there is an upward trend keeping the market moving. New homes are also being sold steadily with a range of incentives from housebuilders, so to buy a house now gives extra value for money for purchasers with the discounts and offers that are available.


Yuri Brixenmortar

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