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Competition drives investors to the east
A new property study has revealed that positive growth forecasts and competition for prime real estate is driving the expansion of the European housing market.
The Global Property Survey from the Royal Institution of Chartered Surveyors (RICS) shows that while many investors flock to the emerging eastern European markets, some UK buyers are choosing to stick to more established investment destinations.
Oliver Gilmartin, RICS senior economist, said that the growth of the property market, especially in eastern Europe, was self-perpetuating, as competition for housing drove investors to previously peripheral regions.
"As the economic slowdown continues across the US," he said, "the smart money has been flowing to more lucrative established European shores.
"This trend should continue throughout 2007 although supply constraints in eastern Europe are encouraging greater risk-taking outside the more traditional locations."
However, he added that investors should consider the importance of economic fluctuations to an investment destination's growth rate:
"Investors must be careful to discriminate between those markets where weight of money, as opposed to fundamental factors, are driving short term gains."
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