June really was a pivotal month in the European recovery. The European Central Bank showed itself to be, belatedly, one of the most activist and radical central banks in the world by cutting its deposit rate to negative territory, the first major central bank to do so, and announcing a new Targeted EUR400m LTRO (Long Term Refinancing Operation) designed to get European banks lending to corporations. Moreover, at Europe's fringes, Russia and Ukraine entered peace talks, reinforcing our view that this is a localised crisis. Accordingly, we can now get back from geopolitics to looking at real estate fundamentals, focussing on the Central and Eastern European markets in this issue. To be sure it's not all plain sailing in the CEE region. But even a no-confidence vote in the Polish Prime Minister and bank runs on two Bulgarian domestic banks didn't knock the region's wider equity and bond markets in June. This is because the flow of real economic data has been generally positive, supporting property investment volumes and pricing.
Source : CBRE Global Investors