Real Estate Investor Magazine South Africa May 2013 | Page 56

EUROPE

Moscow, Russia

BY JAMES COLBY

Zagreb, Crotia

Skopje, Macedonia

Istanbul, Turkey

Investing In Europe
Is the crisis over?

I

s the Eurozone crisis over? Most experts
warn that although the storm has slowed
it is far from over. After four years the
Eurozone still doesn’t have the f iscal or
banking unions it needs to make the monetary
union work, and despite the European Central
Bank promising to do whatever it takes to save
the common currency, countries in Europe
are still reeling and more are running into
trouble. So why do we have this crisis? Well
when banks make bad bets on their own
companies it’s not an ideal situation but when
a country doesn’t have it’s own central bank,
that bad bet can bankrupt the country. In light
of the financially turbulent times in Europe,
there are still countries whose property is
worth investing in. The global property guide
highlights the top nine European countries
you should be investing in now.

Russia
The last few years have wrought change in
Russia and Moscow as well as other regions
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May 2013 SA Real Estate Investor

which boast newly opened shopping malls
and an off ice market that is still standing
strong, despite the European economic
situations. In 2011 the total area of residential
housing constr ucted increased by 6.7% ,
bringing the total area of housing stock to
about 3.3 billion sq m. The rental yields in
Moscow are high, with an average of EUR40
to EUR 48 per sq m per month, but the
price of property outstrips the rental yields
with the price of a sq m going from EUR
11, 000 to EUR 15, 000. So if not Moscow
where should you look at? In St Petersburg,
the gross rental yields have a good rate of
return, with 65 sq m getting a rate of 7.49%.
St Petersburg is the former imperial capital
of Russia, originally founded by the Tsar. It
is still the cultural capital of Russia and the
most westernised city in Russia. According
to the Land Code of 2001, private ownership
of land properties is allowed for both locals
and foreigners. The legislation was extended
to Moscow in January 2006.

Croatia
Croatia’s largest city and the national capital is
Zagreb. A thousand-year-old city on the banks
of the Sava River, Zagreb is a chic, friendly
destination for tourists looking to enjoy the
charms of Europe on a budget. While Croatia
as a whole still remains adversely affected
by the Eurozone crisis, property prices are
falling, meaning now might be a good time
to purchase a property before the prices begin
to rise again, and with a strong tourist rental
market, a holiday home in Croatia’s capital
could make for a good nest egg. The only
downside is the economic uncertainty, making
this investment a bit of a gamble.

Skopje, Macedonia
Macedonia has been on the road to recovery and
stability, with new properties and developments
on the cards as foreign interest has surged into
the capital. Despite rapid growth in household
lending since 2003, outstanding housing loans
were still only 1% of GDP in 2007. In 2010,
www.reimag.co.za