It is little wonder that this year’s report is bearish in outlook. As interviews were being conducted around the region in the closing weeks of 2011, U.K. property values fell for the first time in almost two and a half years, and Eurohypo and Société Générale announced their with drawals from the property lending market. On a macro-economic level, Italy’s borrowing costs were creeping up to unsustainable levels, and breakup of the Eurozone could not be ruled out. To many, the current real estate climate is worryingly familiar, wrapped up in a renewed liquidity crisis that feels almost as severe as the one that followed Lehman’s collapse. Inertia is a common coping mechanism, as investors wait to see when and how Merkel and Sarkozy solve Europe’s financial riddles.
Source : Urban Land Institute