Coffee with Craig Show – daily CRE news covering the CEE region, Tuesday, May 23, with Winston Norman, Editor and Chief of EuropaProperty.com.
European residential markets under pressure from rate hikes as valuations stagnate
The decade-long bull run in European residential investment markets driven by ultra-low interest rates, is coming under intense pressure from ECB rate hikes, with valuations stagnating due to the wide gap in expectations between most buyers and sellers, but there are now signs of bigger deals being done and a new lower consensus price floor may emerge in coming months, according to the latest Catella Residential Markets Overview.
Prof. Dr Thomas Beyerle, Head of Research Catella Group, said: “After months of stagnation due to the rapid rise in interest rates, the first sizeable transactions in residential investment markets are just starting to occur again primarily due to strong pent-up in housing demand in European cities being met by very limited supply.”
The most attractive prime yields can be found in the Baltic cities of Vilnius at 5.50 percent (+10 basis points to Q3 2022) and Riga at 5.40 percent (+5 basis points to Q3 2022), as well as in the Polish cities of Krakow at 5.40 percent (+15 basis points to Q3 2022) and Wroclaw also at 5.40 percent (+15 basis points to Q3 2022).
Lodz is one of the most cost-effective cities in Europe to live in
Many people are still experiencing the financial effects of the pandemic in their cities, with inflation rates and the cost of living rising in many countries. With searches for ‘where is the most cost-effective place to live’ rising +100 percent over the past 12 months, it’s clear that many people are looking to relocate for a better quality of life.
To find the most cost-effective cities, new research from Compare the Market AU analysed factors such as income tax rate, inflation rates, average income and cost of living costs to create an index. The research shows:
Bucharest in Romania ranks first with the lowest income tax at 10 percent. Lódz in Poland ranks 5th with one of the highest inflation rates, but the average groceries shop costs as little as €17.71 on average
Commenting on the research, Stephen Zeller, General Manager of Money at Compare the Market said: “Over the past few years following the pandemic as inflation rates and income tax in many countries have risen, many people have felt the financial effects. On the back of this, many are looking to relocate to cities which are more cost-effective for a better quality of life.”
Panattoni gets €64 million from BGK for developments in Poland
Panattoni has been granted a €64 million loan by BGK Bank for yet more projects. The financing is to be used to develop a complex for Poczta Polska in Radzymin as well as two buildings within Panattoni Park Grudziądz.
“The diversification of our operations across Poland is recognised by financial institutions so they are keen to support us in more of our developments. We wish to thank BGK for their constructive partnership and look forward to working with them on further joint projects,” says Karina Trojańska, the Chief Financing & Operating Officer at Panattoni.
