For those of us visiting countries within the Eurozone for our summer vacations, from the U.S. or UK in particular, the exchange rates on offer when purchasing our spending money have been a stark reminder of how well the Eurozone economies have been performing in 2017. And while this performance does deserve attention, as in our recent report ‘Welcome to the Euroboom,’ we should not overlook the ongoing strength of some of the European countries outside of the currency bloc. In this month’s Europe Watch we take the opportunity to look at current economic and real estate market conditions in the Czech Republic, Hungary and Poland. There are some, mainly political, reasons for caution, most notably policy uncertainty being generated by the PiS government in Poland. Despite this, growth continues apace across the region, and near-term forecasts are being revised upwards. These countries have benefitted disproportionately from the upswing in global demand and are being further aided by supportive fiscal policy but to various extents are now facing capacity constraints. Tight labour markets are now driving rapid wage increases, and consequently consumer spending has been a key driver of growth across the region. This is clearly a positive for retail property but also suggests that growth may start to cool over the coming years.
Source : CBRE Global Investors