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European
property investment risk
People thinking
of buying property in Europe with a view to renting it out, may
have missed the boat. This is according to research on the European
housing market by the Royal Institute of Chartered Surveyors (RICS).
Most countries in Europe have already experienced rapid house price
growth and are now stabilising, according to the report. Only the
UK, Spain and Ireland continue to benefit from larger growth figures.
So although properties might look cheap in some parts of Europe
when compared with the UK many of these markets have already run
out of steam.
Some countries have witnessed fast growth in their buy-to-let markets
as European governments reduce the amount of social housing available
in favour of privately rented accomodation. For example, 36% of
Dutch people are in social housing but the country has a policy
of increasing home ownership. Currently around 55% of Dutch people
own their own homes but the government wants to increase this to
65 percent by 2010. This will reduce the need for social housing.
The RICS report states the large number of Britons buying second
homes on the continent is not likely to affect house prices in those
areas as second homes are never more than 10% of a housing market.
"To a certain extent the holiday home market is detached because
its more influenced by the economy in other countries (such as the
UK). It is the Barcelonas and Madrids that have been driving this
housing boom not the Malagas."
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