EU Property Investment Losses Mounting, It’s Time To Head West

As I write this, I am sitting in a country that was once one of the best places to invest in property in the EU. The temperature outside is -5, possibly several degrees lower with the wind chill. The country is Slovakia and there are only a few people outside braving the elements.

The temperature is about as low as most property markets have been in the EU in 2012. Only one solitary country, which happens to be next door to Slovakia, registered anything like growth in 2012, yet even growth in Austria is beginning to slow down as it also succumbs to the creeping layer of ice forming over most of Europe.

According to the recent Knight Frank Global House Price Index, the Eurozone’s 17 member states have seen prices fall by 1.8 per cent on average in the 12 months to September.  With the exception of Croatia, the bottom 10 countries in the index are all from the EU.

The euphoria that came with many countries joining the EU in the last decade has almost certainly been replaced by the grim fact that no country has managed to gain any real long term benefit where the value of property is concerned.

So where should an investor be looking for a mature market that offers anything like the growth which makes property investment worthwhile?

The good news is, if you head west to Miami, there is a boom that has never been seen before. Florida property is thawing out fast at the moment. The average rent of a 2-bed apartment in Miami increased by 6% in 2012 and the median sales price of condos rose 24.2% to $146,000 in the year to October.

A combination of population growth, where Miami has seen the biggest increase in the past decade at 2.1% and shortage of supply, as developers have taken time to gear up their operations, are two reasons for this boom.

Add in increased interest from foreign investors from Brazil, other Latin American countries and Canada and the outlook is far hotter in the Sunshine State in 2013 than it will be in the EU.

What are your predictions for EU property in 2013? Please leave your comments below:

Kind regards

Brett Tudor
Property Expert

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