Since the economic crisis that we have been carrying for a decade, we have seen many changes at real-estate market European Union, for example, a significant straightening in markets such as French, Irish, Spanish or Portuguese. The main cities, as well as the coastal areas, in these countries have returned or are above the levels of real estate business before the crisis, while the provincial areas have not yet added to this improvement.
The total number of real estate transactions has increased by 10% year after year since 2013
On the other hand, many of the northern European countries, such as Germany, Sweden, the Netherlands, the Netherlands, Austria and the United Kingdom, are in a process of rising prices and low supply. Again, these factors more to the capital cities than to the secondary ones. Stockholm, for example, has suffered an increase in sales prices of almost double, and something similar, although not so exaggerated, has happened in Copenhagen, Munich, Amsterdam and Brussels.
One of the key factors to understand this phenomenon are investment funds. Fund managers and investors see the sector of the real-estate market as the only valid investment path given the negative interest rates, the 0 or negative bond yields, and the poor performance of the stock market. Where investors see an opportunity they decide to invest, which causes prices to rise.
In summary, while prices are increasing we can perceive a more attractive market from the perspective of the owners, who take advantage of it to increase rents. Barcelona, Milan and Madrid are the cities that are leading this rise, while they are also beginning to attract domestic investment.
While investors are looking for new markets, we can expect, therefore, a rise in prices in several cities and also in several areas of the real estate sector such as student rental.
About the Author:
Ramón Riera Torroba
President of FIABCI Europe
President of FIABCI Spain
CEO of Eurofincas · International Real Estate