Europe's 'phantom' property downturn

The extent of Europe’s property slowdown has been exaggerated, claims Assetz…

If the UK property market has been subjected to some rather severe predictions about the property market in general and buy-to-let in particular, with the recent Homebuyer and Property Show in Birmingham having a debate entitled: "Is the UK buy-to-let sector facing its Armageddon?", the same can be said across Europe.

Here, some are predicting that it is as good as the end of the world for the continent's property markets as the global credit crunch hits home in a number of different countries.

Of course, what has happened is a slowdown across Europe, with the Royal Institution of Chartered Surveyors stating in its European Housing Review that the boom was over. While it noted that this trend was not without exceptions, describing Cyprus - where house price inflation rose - as "a rare case of a country shrugging off the gloom", the overall picture was indeed a dark one.

Investors still out there

Yet is it really so dark? Seeking to shine a torch on the situation, Paul Owen, chief executive of the Association of International Property Professionals (AIPP), said: "It is a bit apocalyptic to talk about the boom being over because prices have slowed [though] the argument that the market slowed up in the second half of last year is self-evident."

So in addition to Armageddon in Britain, Europe has been talked about as facing the apocalypse. But Mr Owen suggested such talk has been completely overblown. To him the situation has been one of uncertainty, punctured recently by a "collective sigh of relief within the industry" at the first two exhibitions staged by the AIPP this year, when it became clear that investors are still out there.

He added: "The Change that we have seen in the last 18 months or so has been where a greater proportion of the buyers are investors as opposed to holiday home buyers but if you look at profits and the specifics of emigration there are still very strong numbers leaving the UK full-time looking to buy property. So it being the end of something I find a little over the top."

Knee-Jerk reaction

Maybe the reaction to the downturn has been a knee-jerk one, which having perhaps imagined that the boom years will never end now Sees no light at the end of the tunnel in more fallow times. In the meantime, apart from tapping in to the Cypriot boom, many will still be drawn to the most popular places like Spain and France.

VEF pointed out this week that those looking to the latter country can find properties 28 per cent cheaper on average than their UK equivalents, or 50 per cent in comparison with homes in the south-east of England.

So for investors, there are still prospects out there and the market is still very much alive.