Property values all across Europe fell last year due to a weakening demand of new buyers. As more and more investors struggle to come up with the necessary funds to buy a second home or even afford a first home, the demand for property in the continent is diminishing across .
A house that might have had strong capital growth potential within a single year only a couple of years ago is now more likely to report stagnant increases in value or even staggering losses altogether. In Ireland for example, prices of property were down by 9.1% last year.
Similar figures appeared all over the European continent:
- France property values were down by 9.9%
- Germany real estate was down by 2.2%
- Britain’s housing industry was down by 16.2%
- Norway was down by 7.5%
- Poland real estate fell by 7%
- Iceland property values fell by 2.7%
- Finland’s market fell by 3.3%
While these all indicate a worsening economy one of the biggest “fall from grace” was seen in Estonia. While home buyers enjoyed a massive 18% appreciation back in 2007 last year painted an entirely different picture.
The Baltic nation saw property losses of 23% in 2008!
Experts say the reason behind the huge losses is the fact that many Baltic nations saw tremendous growth over the last few years. Overseas banks were more than ready to offer credit to investors resulting in an oversupply of property. The resulting loss is a mere correction of the market.
Another contributing factor seen to have influenced these markets were the much talked about collapse of Lehman Brothers back in September last year.
According to the Halifax house price index, the UK housing market continues to weaken. In February prices fell by a further 2.3%.
Many industry watchers expect core European markets to suffer “marked downturns” this year as home owners are forced to sell fast to recuperate most of their debts. This of course offers tremendous opportunities for cashed-up buyers ready to grow their real estate portfolios.
Photo credits: Charles via flickr