Property remains a popular investment choice for financial gain, however 2011 will not go down in history as one of the more successful years for property investors. With this in mind international estate agents Colordarcy have compiled their own report outlining which five countries they believe were the worst to invest in 2011.
In fifth place was the Czech Republic where annual property price increases of between 20 to 30% are a distant memory and now a combination of high prices, oversupply and some of the lowest rental yields in Europe have made this a property investor’s bohemian nightmare.
In fourth place was Bulgaria which was once regarded as the ‘the new Spain’ for overseas investors, but not anymore. Property prices are in freefall and with the exit of British and Irish buyers, Russian investors now dominate the market and their strong bargaining skills result in continued falling prices.
In third place was Greece. With a debt to the tune of €340bn and property prices falling by 10% in the first half of 2011 alone, it is deserving of its podium placing.
In second place was Cyprus. A long-time favourite with British investors, but now even its biggest advocates are losing interest. A stagnant economy and its vulnerability to the Greek crisis with two of its largest banks exposed to a total of €5bn does not bode well.
Finally in first place was Ireland. It seems that ‘the luck of the Irish’ has finally deserted them. Once the envy of the world when the property markets boomed between 2000 and 2006, the sheer scale of their downward spiral becomes apparent when you recognise that apartment prices fuelled by yet another painful 15% fall in 2011 are now down by a massive 60% from their peak.
Loxley McKenzie MD of Colordarcy.com said: “For a property market to be of interest to savvy investors it needs certain qualities in order to make it viable; a stable economy, good capital growth prospects, a reliable rental market and accessibility to mortgage finance.
“Ultimately property should be an investment that pays for itself. However anyone investing in any of the five featured countries will probably have ended up losing money in the last 12 months. It is significant that all five countries are from the European arena and no surprise following the recent rekindling of the debt crisis in the Eurozone and the impact this has had on those countries struggling to recover from the economic slowdown within its borders.”