Are these the worst places to buy property in Europe?

By : Nick Marr

The Global property guide have identified three of poorest performing housing markets in Europe. These are Ukraine, Russia and Greece. All three countries were under performing in otherwise buoyant European real estate market.

Ukraine remained the world’s weakest housing market in our survey. In Kiev the average price of new residential properties plummeted by 36.6% y-o-y in Q3 2014, in contrast with annual rises of 4.61% in Q3 2013 and 2.14% in Q3 2012. House prices in the capital plunged 10.45% q-o-q in Q3 2014. This could be mainly attributed to a surge in inflation in Ukraine. In October 2014, the country’s inflation rate soared to 19.8%, up from 17.5% and 14.2% in the previous months and the fastest rate since February 2009.

An eight-month military conflict with pro-Russian separatists in the east is now adversely affecting the currency, driving up food prices, and pushing Ukraine deeper into recession. The economy is projected to decline by 7% this year, after an annual contraction of 0.04% in 2013 and an annual growth of 0.25% in 2012. Said separatist conflict has wiped out almost 25% of industrial output in the country.

Greece continues to show improvement, though it remains the world’s second weakest housing market in our global survey. Greek house prices fell by 7.08% during the year to Q3 2014, an improvement from y-o-y declines of 9.69% in Q3 2013 and 13.58% in Q3 2012. However, Greek house prices declined by only 0.17% q-o-q in Q3 2014.

Greece’s economy is likely to grow by 0.6% this year, after six years of contraction, according to the Hellenic Statistical Authority (ELSTAT).

Russia‘s housing market woes continue. Residential property prices dropped 5.68% y-o-y in Q3 2014, after annual price decline of 3.64% in Q3 2013, and a y-o-y rise of 9.8% in Q3 2012. House prices dropped 0.74% q-o-q in Q3 2014.

The Russian economy is expected to grow by a meagre 0.24% this year, after real GDP growth rates of 1.3% in 2013, 3.4% in 2012 and 4.3% in 2011, according to the IMF.

Is this all bad news ? I don’t think so, good investors know that profits can be made right from the purchase and by identifying regions within poor performing countries you may well have a sound investment. Of course where there is war and conflict this may not be possible however some Greek Islands for example have limited amount of property and still attract overseas visitors. It seems out of the three poor performers Greek real estate could be the safest of them all.