2014: Property Investment Trends in 5 European CitiesAll property markets have pockets of value and Europe is no different. Here we take a look at 5 of the most popular markets for overseas property investors in 2014.
Malta: One of the world's smallest and most densely populated countries has had a huge amount of interest from foreign buyers in 2014, particular at the high-end price range. The years 2008-2013 saw falling house prices in Malta, losing around 40% in value. Before 2008 property prices increased at around 10% to 15% annually.
European buyers lead the league table of foreign investors with a small percentage of Americans on the island (0.3%). Notable interest also comes from Asia at 3%, Russia (2%) and Africa (0.7%).
Bucharest: Romania's largest city has experienced a construction surge with nearly 1,500 new residential units completed in Q1 2014, compared to 900 in Q1 2013, figures that compare with the economic boom period of 2007. In general, property transactions have increased by 8% in Q1 2014 compared to the same period in 2013.
American buyers represent less than 1% of foreign investors with the majority of interest coming from Spain, Hungary, Austria, Germany, UK, Israel, Turkey and China.
Barcelona: Spain was one of the hardest hit by the financial crisis of 2008 although now, the nation is emerging from recession at a rapid pace, compared with other EU member countries.
House prices have fallen consistently over the last 6 years however, in Barcelona it would appear that a good degree of price stability has now been achieved, particularly in the prime market. Property sales increased by 14% over the second quarter, marking the first quarter in 8 years in which both sales and prices increased at the same time.
As evidenced throughout Spain, the majority of foreign buyers are British (14%) followed by France (11%), Russia (9%), Germany (8%), Belgium (7%), Switzerland (11%) and the United States (3%).
Rome: Italy's capital city is now seeing signs of growth after 7 consecutive years of real estate contraction. In Q1 2014, 6,579 properties were sold in the city, a 0.6% increase year-on-year as housing prices decreased over previous quarters.
Russian buyers represent the majority of foreign buyers at 12%, followed by the UK with 10%, Germany 9%, France 8%, US 7% and China 5%.
Berlin: The German capital city continues to enjoy interest from foreign property investors with the average time on the market to sell at 8 to 9 months. There is a distinct supply shortage in Berlin, below 2% on average and 1.5% in central areas of the city. This is due to the strength of the German economy, low interest rates and an increasing population.
Experts estimate a requirement for 11,000 housing units to be built annually although just 6,500 new residential units are being constructed each year. Largely a rental market, home ownership in Berlin has increased to approximately 15% due to an increase in first-time buyers.
Berlin is a popular market for Russian buyers which, a trend that continues in today's market. The second largest group of foreign buyers are from Italy with a notable increase in interest from southern Europeans from Greece and France.