Strong Year For Eu Housing Markets
Yet again, 2005 was a strong year for the majority of the EU housing markets as house price inflation remained impressive in all but a handful of countries.
The latest assessment from the Royal Institution of Chartered Surveyors (Rics) has said that while some of the smaller countries saw the most astonishing growth, "the great European house price boom continues on its way".
Experts from Rics suggest that growth in 2006 may be slightly slower than in past years, but it is an evaluation that is checked by the reassuring news that there is no evidence at all of a property crash in any of the European housing markets.
Property investment in Europe is as popular as ever with UK residents, largely because of the amount of choice available as a result of new flight routes and the expansion of the EU. As Rics has observed, it is a situation that inevitably leads to dramatic house price inflation in some of the emerging markets where house prices are seriously lagging behind, which can provide considerable returns to investors over a short period of time.
On the other hand, the most sensible options in terms of sustained demand for property continue to be the likes of Spain and France, both of which have led the way in the European property market for several years.
Despite the expected slowdown of property price increases this year, European investors remain spoilt for choice in the context of the worldwide real estate industry. Rics has commented that house prices have been "amongst the highest in the world during the latest upturn" providing investors with remarkable returns throughout the EU.
As countries such as Bulgaria and Romania prepare themselves for European accession, the situation is set to improve further. Increasingly, property investment is an industry that is unconstrained by geographical barriers, as individuals purchase properties in a variety of countries to maximise their long-term gains.
Spain in particular looks set to retain its status as one of the leading lights in the European property market after the housing boom continued in earnest last year. On an annualised basis, growth was slightly lower than it was in 2004, but at 14 per cent it still indicates that the country is ripe for investment projects.
Since 1998, national house prices in real terms have increased by around 120 per cent, while recent reports on house building rates and mortgage markets suggest the trend is unrelenting. At the same time, increased building rates mean supply may finally begin to catch up with demand, which is why the market may be a little slower this year. Then again, investors will be pleased to hear that "a soft landing to the housing market boom is the general prognosis in the absence of any severe economic or financial shocks".
Moreover, investors are increasingly seeking expert advice on the best places to purchase property, exploiting regionalised house price inflation. In Spain, property investors are expecting good returns in Murcia and Alicante, for instance, while investing around golf courses in one of the world's most fanatical golfing nations is almost always a good bet.
Clearly, the success of property markets beyond the usual favourites has been great for investors looking for a change of scenery, but it has also meant that the decision-making process is all the more complicated. It would seem that it is now more important than ever to conduct comprehensive research before committing to a property project, to ensure returns are as high as possible in often unfamiliar markets.