A report by US-based investment firm La Salle has cast a very interesting light on the European property market and the medium term prospects for the London sector. The latest index of Europe’s leading property hotspots uses a variety of information to rank each property market with regards to medium term value. It will obviously come as no surprise to learn that London has fallen in the index but does this really mean the end for the London property market?
Movers and shakers
Aside from Paris taking the number one spot from London there are an array of other interesting movers in the top 10 index. The main movers and shakers in the index include Dublin which has moved up five places to number seven, Munich which has improved by three places and now stands at number four and Madrid which has also moved up three places and now stands at position eight.
When you bear in mind how difficult the Irish property market has been for some time now it is interesting to see Dublin so strong. This is a city which has attracted significant investment from Europe and indeed while the country has been through its fair share of economic difficulties it is worth remembering that the bailout loan the country received was paid back early. So it may well be that the Dublin property market offers good value in the medium term and is worthy of a review by investors.
Germany is at the centre of the European Union and in effect pulls all of the strings in relation to policies and major decisions. It is interesting to see Munich moving into fourth place when considering the medium-term prospects for the city’s property market. Indeed just a few weeks ago there was a report in the German press suggesting that the Munich “housing price bubble” could pop at any time. However, it would appear that many investors still have significant confidence in the region.
Prospects for the Spanish property market in the short to medium term seem mixed at best but there has been an increase in construction activity in and around Madrid. As a consequence, perhaps it is no surprise to see Madrid rising up the index on what many believe to be sound medium-term prospects. Tentatively some property investment experts are suggesting that the Spanish market is stabilising but in these relatively early stages of a potential recovery, performance will be patchy and many may focus on core markets such as Madrid.
Does Paris really offer better value than London in the medium term?
Many property investors will be surprised to learn that Paris is seen as a greater medium-term prospect than the London property market. However, when you bear in mind the recent dominance of the London market within the European scene and the forthcoming Brexit it is really a surprise to see London drop to number two?
In the short to medium term there is political uncertainty, economic uncertainty as well as constitutional issues such as a potential independence referendum for Scotland. It is no surprise that all of these issues, coming at the same time as the pound continues to plummet, have created a significant degree of uncertainty. On the flipside of the coin, the Paris property market has been subdued for some time so perhaps it is a straight fight between the relative value of Paris property and the uncertainty in London.
Once the dust has settled will London regain the top spot?