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How is the Property Market Performing in Other Countries?

At the beginning of 2018, some UK estate agents noted soberly that the British property market was off to a slow start.

Whether the trend will continue remains to be seen, but other European countries appear to be experiencing their own property market challenges.

Portugal

Residential property prices in Portugal appear to be recovering. The country’s latest real estate index suggested that they are slowly approaching pre-economic crisis level thanks to increases in both demand and sales.

However, a January 2018 survey of the housing market carried out by Confidencial Imobiliário and the Royal Institution of Chartered Surveyors indicates that the number of new instructions have been declining for several months in a row, especially in Lisbon, Porto and the Algarve. This deficit does not appear to be hindering activity too much, with Lisbon and Porto reporting solid growth.

Spain

The real estate market in Spain was hit hard when the property bubble burst in 2008, but recent official figures suggest that transaction levels have reached their pre-crisis heights although property prices remain lower.

Nearly 465,000 property sales or purchases were recorded last year, many of them fuelled by Spain’s strong economic growth. It was the highest annual figure since 2008 and represents an increase of nearly 15% from 2016.

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France

Last year France’s residential property market got back on track, with sales reaching 958,000 by October 2017. It was an increase of 15.6% over the previous year.

The latest property analysis report also revealed that first-time buyers were re-entering the French market, driving prices up 3.9% (5.8% in Paris) in the first three-quarters of the year. However, the number of buy to let investors kept declining, accounting for 21% of sales compared to 30% in 2012. One report attributed the decline to the increasing popularity of short rentals, such as those offered by Airbnb.

Switzerland and Norway

In Switzerland and Norway, there are concerns about an imminent crash after central bankers warned that they may have to take steps to address increased house prices and reduced family finances.

Lower interest rates worldwide have driven up asset prices and led to worry that investments like residential property are over-priced. As the global economic revival gains momentum, there are also concerns that markets are overheating and could crash if central banks raise interest rates.

Germany

According to an analysis made public at the German Property Federation, the residential property boom in Germany may be coming to a stop soon, especially in active markets like Berlin, Munich, and Stuttgart. The report was published by a group of real estate professionals who call themselves the “Council of Real Estate Wise Men.”

This council and other German property market experts anticipate that the country’s real estate market will be nationally uneven as construction work continues and the longer-term projects are finally concluded. Concerns about rising interest rates, combined with a reduction in immigration and growing political uncertainty, may also have a dampening effect on demand.

Specialists in Construction Insurance

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