European Housing Markets - which countries are performing the best?
Many countries in Europe have been ranked in order of the way in which their housing market performs. Property group CBRE have looked at the way in which they have performed over the last five years.
England has performed well but the likes of Turkey, Iceland and Austria have also performed extremely well along with Sweden. 80% of these counties do not form part of the Eurozone which has experienced a crisis and have therefore gone through their own recovery.
Turkey is at the top of the list with house prices growing at the fastest rate with prices increasing by 91.3% over the last five years. The economy in Turkey is growing and this is down to the way in which Istanbul is being developed. The population there is young and with new housing developments, people are keen to purchase. The banks in Turkey now have more power and are now more willing to lend than ever before and this has helped house prices to rise.
Iceland has seen prices increase by 42.1% over the past five years and their recovery from their economic crash came late. The price of property began at a low price but new developments in the capital Reykjavik have helped prices to increase.
House prices in Austria have grown by 27.6% and this has been achieved during a slow growth in the economy. Vienna is now seeing overseas property investment from foreign buyers due to it being classed as the world’s best city to live in.
Many of the investors in the luxury residential market come from Russia and Ukraine and the city is seen as a safe bet when it comes to investment.
In England there is shortage of properties and with many foreign investors hitting the market along with slow growth in wages, it has become difficult for many to own a property. In London, the price of property increased by 20% up until June 2014 but since, the chancellor has introduced a rise in stamp duty for properties worth more than £937,000 and with stricter rules on lending, the growth has declined.
Sweden comes fifth in the list with growth sitting at 25.8% but the housing market here is also at risk of becoming too hot. Lending has been easy and this means that the housing market could find itself in a bubble. However, many believe that Sweden is not heading towards a bubble just yet due to the fact that the housing market has never really struggled with the county handling the 2008 financial crisis extremely well.
At the bottom of the list is Spain and Italy with prices dropping by 29.5% and 14% respectively. For those investors who have been waiting for a drop in price, now could be the time to invest and already, many investors have started purchasing property.
On the whole, the housing markets throughout Europe have a relatively positive outlook despite the results of the EU referendum.
The healthy growth in these economies has been helped by sensible lending and equity as opposed to debt all of which points towards a positive future.