Spain, Italy commercial real estate market is near collapse
Only three commercial real estate transactions of the second quarter of this year, Spain registered pen, 58 pen below the previous quarter. Real Capital Analytics data show that in Italy, the market decline is more apparent during the only two real estate transactions in the previous quarter to 56.
The severity of market declines highlight the trend due to the instability of the euro-zone economy, investors worried about the purchase of these two countries the risk of fixed assets.
The second quarter, the Spanish office buildings, shops and industrial real estate transactions valued at 67 million euros, compared with 260 million euros in the first quarter fell 74%. Trading weak means that the Spanish real estate transactions for the first time inferior to the neighboring country of Portugal.
Joseph • Kelly (Joseph Kelly), a market analysis director of Real Capital Analytics, said: “The risk aversion increase (especially cross-border institutional investors) leads to the southern European real estate transaction is almost complete collapse.”
In Italy, during the economic downturn, one of the few real estate field (such as Milan retail store market) has been performing well. However, the people of the country economy and its worry about the future status of the euro area have increased, which seemed to stifle the market, investor confidence.
Spanish real estate market was once the most active market in Europe, the decline is relatively gradual.
The beginning of this century, the Spanish real estate industry due to cheap loans and future demand is expected to heat expansion. But the global credit crunch has weakened investor confidence in the market, Spain hundreds of billions of euros in real estate values to be erased. The country’s banks hold large amounts of office, retail and development of land, most of them only sell low discounted price.
The previous quarter, real estate transactions rose sharply reduce the cost of borrowing and Spain simultaneously, which suggests that investors are even buying interest in the plight of real estate has disappeared.
Leading real estate economists have pointed out the negative attitude of the investors in Spain and Italy on the status of their respective real estate market.
Real estate services group Jones Lang LaSalle (Jones Lang LaSalle), European head of Wu Boqi (Christian Ulbrich), as the market continues downstream, the reality became clear. “Since the end of last year, the situation is serious deterioration of prices are severe decline.”
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