property hotspots

Where are the top property investment hotspots in Europe?



At a time of such political and economic uncertainty, it’s prudent for investors to think about diversifying their property investment portfolio to include property hotspots outside London.

There are three countries whose economic, social and infrastructural improvements make them worth considering

Spain

Spain has recently started showing positive signs of recovery from the 2008 credit crunch and, consequently, has been identified as a prosperous hub for property investment. This has led companies such as Intu Properties PLC, AEW and Cogress to expand into the country. 

Based on the latest figures from the National Statistics Institute, Spain’s economy has bounced back to exceed its pre-crisis GDP levels. The country’s improved economic performance has put it back on the radar of many international investors. Property investment has benefited from these trends, with the residential property market receiving significant inflows of foreign, as well as domestic, funds.

In addition, increased confidence in the economy and the future job market, combined with a drop in interest rates and better financing terms and conditions, have propelled property demand, especially in Madrid. Despite the arrival of several institutional investors recently, there is still a shortage of private investment capital, opening the market for future-gazing investors.

The Netherlands

The latest data from the land registry office and national statistics bureau showed that house prices in the country rose 7.3% in March, compared with the same period in the previous year. This marked the biggest increase in 15 years.

This surge has been partly attributed to Amsterdam’s potential to attract London-based businesses seeking to relocate to continental Europe following Brexit. The boom is also driven by a shortage of properties for sale in Amsterdam and Utrecht with construction levels being too insufficient to close the gap between supply and demand. Like the rest of Europe, low interest rates in the Netherlands is fueling borrowing and house prices. Lastly, the country’s falling unemployment levels, growing economy and high levels of consumer confidence will help attract foreign investment in the real estate market in the future.

Germany

Investors can simply not overlook the largest real estate market in Europe. Data from Savills shows that housing prices in Germany have been rising sharply in recent years, and experienced a spike following the UK’s Brexit vote. Also, Franklin Templeton’s property markets review highlighted the country’s record transaction volume of €12.6bn in 2017 Q1 with logistics and residential taking up an ever-increasing share of portfolios. Low interest rates have also been driving the increasing number of property mortgages being issued since 2009.

Ahead of the UK’s March 2019 deadline to leave the EU, Frankfurt, the home of the European Central Bank HQ, has seen its house prices increase, as many expect banks and other financial institutions to relocate to the city.

Ultimately, the country’s stability, relatively robust economy, and shrinking unemployment has helped shape the perception of the country as a safe haven for investors.

 


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