While it is well known that the American real estate market is tanking, is the same true for Europe?The answer is complicated.Interestingly, Central and Eastern Europe have not taken as much of a hit as Western Europe has, and cities like Moscow, Istanbul are still seeing investment and development.Warsaw, the capital of Poland, has actually seen increased investment and development in 2009.
Even the Western European housing market seems to be rebounding somewhat, according to europe-re.com.In the United Kingdom, although prices are still falling, many Britons are taking advantage and buying.“31% more Chartered Surveyors reported a rise than a fall in new buyer enquiries up from 21% in February. Interest is strong in every region with London and Wales leading the way. In the former, 63% more Chartered Surveyors reported a rise than a fall in new buyer enquiries, up from 46% in February. The rise in interest reflects both the drop in asking prices and the sharp fall in the cost of money. As house prices drop, those with finance are now looking to do more than window shop.”1
Despite the fact that Central and Eastern Europe have not seen the same problems as Western Europe, the region has not emerged unscathed.Eastern Europe’s real estate market is known for its high risk level, which may scare away potential investors.Slovenian banks are very reluctant to lend money for real estate investment, and the largest real estate development group in Vienna, Austria, Immoeast, is considering bankruptcy.
Overall, Europeans are experiencing many of the same problems that Americans are facing when it comes to real estate, and it looks as though things are still going to get worse before they get better.
By Michael Collins
