Investors urged to dodge cheap Eurozone property
Monday, 20 February 2012 10:39 AM
Low property prices in crisis hit Eurozone countries may not be worth the risk, a leading overseas property agent has warned.
Assetz says that although distressed property can be bought for 50 per cent less than at the start of the downturn there is a substantial danger involved.
Stuart Law, chief executive of Assetz, warned that the "persistence" of the crisis coupled with a "weak performance" from European Union authorities and governments meant things are likely to get worse before they get better.
If Greece were to leave the Eurozone and return to a devalued national currency that could result in a large fall in property values and also have a knock on effect to other high risk countries such as Spain, Italy and Portugal.
Law said: "The property markets in these countries are not going to recover quickly, as their recessions drag on.
"Sensible investors will wait until there is some indication of a resolution to the sovereign debt crisis in Greece and the impact on the banking sector and the economies of other weaker EU members can be assessed.
"Property may look appealingly cheap in some cases, but it could be worth half of today's values to a foreign owner if it was suddenly being valued in Drachma, which we believe could face a 50 per cent devaluation if Greece leaves the Euro."
Instead he recommended that investors look to solid reliable locations such as France's Cote d'Azur and Paris, or sit tight until the investment situation becomes clearer.
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