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As Emerging Trends 2012 went to press, Europe’s economic outlook remained a grave concern: for its politicians, its financial markets, and not least of all, for its real estate industry. Confidence in Europe’s economic outlook had tumbled to a twoyear low, German factory orders had dropped by more than they have in almost three years, and the euro—which still threatened to evaporate—was poised for its fifth weekly loss against the dollar, the continuation of its longest downward run since February 2010.
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 Societe Generale announced their withdrawals 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.
Source : PWC
