European Housing Markets Slow

According to the European Housing Review 2008, the majority of European housing markets slowed sharply or saw a decline in property prices during the second half of 2007.

The review states that the main cause for this property slump has been the general rise in mortgage rates over the past couple of years. Coupled with the European Central Bank’s interest rate policies and the credit crunch beginning to hit ordinary consumers, the property market throughout Europe has slowed. The two countries which haven’t yet felt the pinch are Cyprus and Iceland where 2007 growth outstripped 2006 growth with prices up by an average of 15%.

Despite some house prices falling, there is no need for foreign property investors to panic – there are still good margins to be made if you choose your property carefully. Some of the newer property markets in Eastern Europe such as Poland are also showing strong property price rises so there is still good money to be made. Germany is also worth watching – the country’s economy has recently turned a corner and although the property market has not yet seen a big upturn, it is expected to grow over the next year. Experts also believe that the housing market downturn it likely to be far less severe that then last downturn in the 1990s therefore if you have a good European property, it will be worth holding onto.

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