The Netherlands, Slovenia, Greece, Portugal and Ireland should be avoided by property investors in 2013 after being the worst performing real estate markets in 2012, it is claimed. Property investment firm, Colordarcy, has put together its list of worst property markets from its own research and reckons it is unlikely that these countries will see any improvements or gains in the coming 12 months.
‘Apart from a few outposts like Brazil, Turkey and Florida, property investors will probably be glad to see the end of 2012,’ said Loxley McKenzie, managing director of Colordarcy. ‘At least investors can now look forward to 2013, with property still the number one investment choice for financial gain. Unfortunately, it is unlikely we will see any gains or improvements in these five markets,’ he added.
The firm says that the Dutch economy shrank 1.6% in the third quarter of 2012 and apartment prices fell by 8.2%. All the indications are that investors who are looking to invest in property in the Netherlands will not see an end to the crisis in 2013. Dutch home owners have some of the highest mortgage debts in Europe, so the falling value of homes is a real cause for concern as is unemployment at a 15 year high.
The Netherlands is Colordarcy’s worst property market this year because they really can’t find a single reason why anyone could have gained anything from investing in this market in 2012 and are unlikely to do so in 2013.
Quote from PropertyCommunity.com : “I have a house south of Carcassonne and I fly there quite often from Dublin. I am mystified as to how the Ryan Air pricing works and how one can go about getting a good priced ticket.”
Back in 2007, Slovenia was touted as Europe’s best kept secret but according to Colordarcy analysts, data on Slovenia’s property market is extremely patchy. The most recent statistic comes from the first quarter of 2012 when prices were 4.9% down on the previous year. Colordarcy also highlight the fact that a major problem is currently brewing in Slovenia relating to property values used for debt insurance. The banks are struggling to come to terms with it and admit that the value of property has been blown out of all proportion.
In Greece the petrol bombs, rioting in the streets and a quarter of the workforce unemployed, this is the stuff of property investment nightmares according to Colordarcy. It says that anyone who ignored the firm’s advice in last year’s worst property markets report may well have seen their property value fall 9% in the first quarter, 10% in the second and 12% in the third.
It believes that Greece, like most struggling countries in Europe, is still in denial as the government struggles to find a formula that the population of the country can swallow and fellow European Union states like Germany can tolerate.
The report also suggests that property in the holiday resorts of Portugal remain expensive in comparison to its neighbour Spain, even though it is one of the toughest countries to obtain a mortgage and it has one of the worst economies in Western Europe. Flat prices fell 10% year on year to May 2012 and overall Knight Frank reported a 7.9% year on year fall in property prices between 2011 and 2012 in Portugal.
The firm says that although in Ireland there are actually some signs of life emerging for those investors with cash, investors should not expect to be able to take an exit anytime soon. Dublin prices are now 55% down from their peak so they can hardly fall further and most analysts agree that the city has now hit bottom, it says, adding that it is virtually impossible for families with one income to get a mortgage, unless that person earns €100,000.