The European real estate market may expect a crisis similar to the one that hit the United States, American experts say. The New York Times reports a sharp drop in property prices in Ireland, Spain, Portugal, the UK, Poland and Estonia. According to the International Monetary Fund, in the industrialized countries, Ireland came in first in terms of overstatement of the cost of housing. In this country, this figure was 30% of the real market value.
Europeans have experienced a rush to invest in housing even more than Americans. And now, the newspaper writes, some of them will bitterly learn that their homes, purchased two years ago, fell in price by at least $ 100 thousand. Many experts in this regard predict a significant slowdown in economic growth in Europe – such forecasts are no longer a revelation in the United States.
Will the crisis in the real estate market become a global phenomenon, commented Alan Reynolds, a senior staff member at the Cato Institute in Washington:
– The nature of this phenomenon is the same in the sense that the cheapening of mortgage loans went not only in the USA, but on a global scale. It was caused by a global decline in inflation from 2001 to 2004. In these conditions, everyone sought to buy a bigger house, then to sell more expensive. The rise in housing prices caused him, so to speak, overproduction. When it was the turn of mass sales of this housing – prices, of course, declined. But I would not call it a total crisis. Being a crisis for sellers, for others it is a great opportunity to buy housing at an affordable price. The buyer of the home always wants a reduction, and the seller wants a price increase.