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Q2 2016 was dominated by the run-up to the EU Referendum and its possible effects.

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European Championship (of property) 2016

As Euro 2016 approaches football teams from across Europe are preparing to compete to be crowned champions of the continent. Previous winners Spain, Germany and France remain among the favourites but which of these football heavyweights boast property markets to match their talents on the pitch?

European Championship (of property) 2016

Here we take a look at the favourites and compare them to the undisputed champion of property in Europe – England. We’ll measure them against their top two cities with each country being compared for potential, average house price, average rents and finally average yields. First up are the current European champions.

Spain

Barcelona and Madrid were in the top ten European cities in a ranking of perceived attractiveness from an investment potential. Barcelona was in fifth place and Madrid in eighth. Looking just at Spain, and FDI (Foreign Direct Investment) by autonomous region, Catalonia was way out ahead with 111 FDIs, up 2.8% on the year before, whilst Madrid attracted 46 FDIs, down 19%. So it appears that the Catalan drive for independence has not yet turned off investors. By country of origin the largest foreign investor in Spain was the USA, follo wed by France, Germany, and the UK. Why is FDI relevant? It says something about investor confidence in Spain, which is currently growing and investing in the country’s future. A bright future is good for Spain’s housing market.

Madrid

Average house price: £114,382; Average rent: £673 Average Yields: 5%

Barcelona

Average House Price: £148,272; Average rent: £647 Average Yields: 4.74%

France

Paris is always one of the big hitters of any discussion about the European property market but it’s not the only place that represents serious returns. The investment-minded head to Nice, where sales to English buyers so far this year have included a £450,000 studio flat on the Promenade des Anglais, purely for high-end corporate lets and a small holiday
flat in the Musicians Quarter for £225,000. Paris is certainly the next most expensive city in Europe outside of London and as with the British capital luxury investments are easy to come by. The annual analysis of the French property market from Home Hunts suggests that there was a large resurgence of British buyers last year. It says that it was a good a year for negotiations due to a combination of flexible property prices, low interest rates and favourable currency pairings

Paris

Price per square meter: £7569; Average Rent: £1345 Average Yields: 3.6%

Nice

Price per square meter: £3927; Average Rent: £562 Average Yields: 7.5%

Germany

The home of efficient powerhouses and elite football teams the German property market reflects the performance of its economy and football. Germans’ fondness for renting homes instead of buying them, fairly flat house-price growth plus rather dismal demographic trends all made the country’s property market look distinctly pedestrian for many years. But with mortgage rates plunging, foreign buyers looking for a safe haven and - more recently - more than one million refugees arriving in the country that received wisdom has been turned on its head. The European Central Bank’s move to negative interest rates may fuel that trend even further. Can it last? House prices have increased 5.6 percent a year over the past five years, according to UBS, which is double the average annual rate of increase since 1970. The main problem with the German market is that although prices are rising quickly yields remain fairly moderate.

Berlin

Price per square meter: £3179; Average rent: £517 Average Yields: 3.54%

Munich

Price per square meter: £5729; Average rent: £770 Average Yields: 3.24%

The UK

The big heavy hitter of not only the European but world property market is London. By and large the capital has and will be among the world leaders in capital appreciation and average yields. With some of the most expensive post codes on the world market London is a primary market for luxury accommodation. This isn’t the whole story for the UK though with the Northern powerhouse cities posting some astonishing recent results. Manchester, Leeds and Liverpool particularly have been performing exceptionally well as business and investment continue to pour in to the areas.

London

Price per square meter: £18,500; Average rent: £2538 Average Yields: 3.65%

Manchester

Price per square meter: £2715; Average rent: £900 Average Yields: 3.41%

Ultimately then we’ve got four extremely strong semi-finalists but there can only be one winner. For sheer prestige, experience and record of success we can’t look beyond the UK property market. In what we hope is a prediction of the football results a British team has won. There is a huge deal of value and profit to be taken from the European market however if investors are willing to look in the right areas. If you are interested in buy-to-let properties in Manchester then find out more here!


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