Property News

S & P Predicts End to Economic Crisis in Europe in 2012

S & P Predicts End to Economic Crisis in Europe in 2012
The credit rating agency, Standard & Poor’s, believes that the European macroeconomic crisis will not extend beyond 2012, which will result in a “significant recovery” of European real estate markets in 2013.

“Standard & Poor’s Ratings Services believes that the macroeconomic crisis may not extend beyond 2012. We still expect a new recession in Europe, although we believe it will be mild, with a gradual return to growth thanks to the growing demand from emerging countries, the strength of demand in developed countries and the restoration of investor confidence,” said the company.
According to El Economista, the baseline scenario of S & P considers there will be a flat growth of the economies of the eurozone as a whole, with growth of 0.5% in France and 0.6% in Germany, while in UK the gross domestic product (GDP) will grow by 0.5%.

Stable outlook for construction
“With respect to the housing market, we look forward to seeing the beginning of a significant recovery in 2013, which will improve macroeconomic conditions and reduce unemployment,” said the agency, which they hope “will boost consumer demand and the valuation of real estate.”
However, S & P noted that the characteristics of the residential housing markets vary throughout Europe, and pointed out that, in their opinion, the United Kingdom, Germany and France, continue to be the “more attractive” developed markets, while Russia appears to be foremost among emerging markets.

Thus, the agency maintains a “stable” outlook on European constructors, qualifying that they are “well capitalised” to meet the medium-term risks related to consumer confidence and the availability of consumer credit.

Also, S & P has noticed an increase in the activity of these companies in the debt markets and noted that the European constructors, as Europe emerges from recession, will need stable access to funding to capitalise on this return to economic growth.