The main buyers of these accounts are big investment funds and private persons. These investors are sure that cheap European real estate will be able to ensure high profitability in the future.
The European real estate market has been the most attractive in the past 10 years. At least, speculators involved in the resale of real estate think so. 3 years ago they visited the American market of real estate that collapsed during the crisis and paid peanuts for apartment houses and offices, aiming to sell them in a year or two, after measures to support the economy produce the desired effect and the prices on real estate go up.
It is Europe’s turn now. The European banks have started selling real estate cheap. Meaning the real estate which they received from mortgage borrowers as indebted property. The point is that mortgage borrowers lost their jobs during the crisis and failed to pay off their credits as a result. There were also other speculators who before the recession hoped that the prices would go up - therefore, they took loans, aiming at first to buy houses and then to resell them. As a result, banks have accumulated accounts to the tune of 600 billion euros. It is absolutely clear now that borrowers will not be able to pay back their deposits. The more so as the rumours about the collapse of the eurosone are not subsiding. The territories in the western and eastern part of Europe are considered to be the tidbits there. Both big investment funds and small investors go there. President of the international Gordon Rock real estate agency Stanislav Zingel says:
"The capitalization of accounts in Germany, Austria, and Switzerland started in 2009. Thus, we can see that these countries are getting advantages from attracting investors to their markets. Other countries are less attractive."
However, not all players are eager to work on the falling market. It may happen that cheap real estate will not rise in price. Besides, the crisis is not over yet. The maximum one can expect, buying real estate in Europe, is the preservation of money. Executive Director of the ALOR Group of Companies Sergei Hestanov says:
"The economic crisis in the PIIGS countries, including Portugal, Ireland, Italy, Greece, and Spain, continues to develop, and their economic problems are multiplying as well. Taking into account the current crisis, there is reason to believe that the real estate market in these countries will find itself in a state of stagnation. And as regards Northern Europe, there is a reverse dynamism there. The real estate market looks sufficiently attractive there from the point of view of preservation of capital."
Regarding the Russian real estate market, we should say that it could become a breeding ground for investors from other countries. As it has become evident in recent years, the price increase of both houses and apartments is steadily outstripping inflation in Russia. For example, the cost of one square metre in Moscow has risen from 5 to 5.500 dollars in the past 6 months, and at the moment there are no grounds to claim that this tendency will be halted.