Safety in numbers: Europe is still benefiting from high levels of cross-border investment. But is the flow of capital sustainable?
The magnetic field that surrounds Europe’s real estate market is still holding strong.
Data from Real Capital Analytics has revealed that a record 40 percent of all capital allocated to property on the continent originated from non-European sources during the third quarter of 2017. Global players are being drawn to Europe for its transparency, position in the current property cycle, and good levels of liquidity in core markets. Its economic prospects are also strengthening — the euro zone saw annual GDP growth accelerate from 1.8 percent in 2016 to 2.5 percent in 2017, the highest annual growth rate since 2007.
“Central banks have also gone to great lengths to manage expectations about future interest rate rises,” says Andrew Angeli, head of UK strategy and research at CBRE Global Investors.
“If inflation remains subdued in Europe, which we anticipate, then the pressure to tighten will not be great. This keeps European property in a Goldilocks position