WHEN it comes to defining a frightening overseas property market, a lack of mortgage finance, declining prices, chronic oversupply, relentless negative press coverage, government corruption and rock-bottom transactions volumes are sure to be the key ingredients.
Fortunately most countries in Europe no longer fit into all of the categories above. France and Italy seem relatively stable and even Bulgaria, which experienced some of the biggest price declines seems to be turning the corner.
As for Portugal, although a debt default now seems likely and an exit from the Euro is a possibility, sound planning laws and a relatively benign government have saved it from some of the worst effects of the crisis.
Spain on the other hand would seem to be a strong contender for this dubious honour. Prices are still falling in many areas, banks seem only willing to lend on their own stock and planning corruption trials are consistently in the news. Oversupply is also an issue in many popular holiday home destinations.
However even in Spain, things seem to be getting a little better. Actual sale prices in many areas have come down 30% to 40% to a level where agents are beginning to see transactions volumes returning.
Spain was always the largest overseas property market in Europe and there is pent-up demand waiting in the wings as prices begin to reach more realistic levels. There is also less chance of a sovereign debt default than in other countries on the periphery of Europe.
If there was a prize for the worst overseas property market in Europe, Cyprus would be the hands down winner.
Prices have fallen significantly but transaction volumes are still a trickle. The banks are in even more trouble than in most other countries as not only have huge real estate exposure but much of this exposure is in Greece.
Standard & Poors and Moody’s seem to be falling over themselves to downgrade Cypriot banks and this can only mean one thing: even tougher mortgage market conditions.
Furthermore, Cyprus is afflicted with a title deeds process which can at best be described as complex, slow and confusing and at worst has been described as fraudulent.
There have been many recent cases of banks repossessing properties from owners through no fault of their own. Unable to produce title deeds, the owners have been evicted when the managing developer defaulted on a loan the owner knew nothing about.
Business seems to be improving in many markets but even if things are not going as well as expected; it could be worse…..you could be selling in Cyprus.
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