The third edition of the report prepared in cooperation with our strategic partner Jones Lang LaSalle ?Residential Markets in Central European Capitals? has already been published. This report presents the latest data on the residential markets in twelve CEE capital cities.
Today?s investment environment in the Central European region is clearly dominated by the global crisis. For some investors the major issue is finding ways through the crisis, while others are searching for opportunities right now. Liquidity shortages and more restrictive mortgage policies in the banking sector translated into a sales standstill of residential properties throughout the region. In turn prices for dwellings are undergoing a necessary correction at different heights depending on the respective market.
Prognoses for the regional economies allow to predict a standstill in the real estate residential business in CEE at least throughout the following year. Amongst the most affected markets are certainly the three Baltic States, with Latvia being in the toughest situation, along with Ukraine which faces a recession. Hungary is also badly affected by the crisis, but its residential market has anyway been performing rather poorly in the recent years.
Poland, Slovakia and the Czech Republic are amongst the most stable housing markets. Nevertheless, all three markets experienced very weak demand levels and first price decreases have already been observed.
Slovenia and Croatia are so far also less affected, yet, the number of transactions has decreased and unsold supply is accumulating. Romania and Bulgaria were hit hard by the credit crunch and are experiencing a standstill in sales, as well rapidly falling price levels.
Paweł Sztejter, Head of Development Consultancy in REAS, says: ?The European Commission predicts that out of only 9 EU member countries with positive GDP growth forecasts in 2009 as much as 6 are from the CEE region. Amongst these countries we observe growing stock of unsold units and a decreased number of transactions in residential markets. All these underline how important it is to define the product perfectly and market it efficiently. The downturn also brings a variety of investment possibilities. Together with our clients, REAS is watching the largest CEE markets attentively, looking for such opportunities?.
Kevin Turpin, Head of Research Central Europe at Jones Lang LaSalle, adds: ?In the long-term, there are good prospects for the recovery of the residential markets in CEE, based on a low housing saturation rate and a vast backlog demand for housing. This is especially true for markets with strong demographic fundamentals. Now is the right time to start preparing and undertaking investment decisions, before the market starts to recover. ?