Investors flee into property

Mistrust of banks, triggered by the crisis in Cyprus, could force investors to seek salvation in the property market. Panic among investors about the new tax on bank deposits of Cyprus happened to be a bit premature. Yesterday Parliament unanimously voted against the "unfair and predatory" law. This decision pleased not only the cypriots but also all the Cyprus banks clients. But the situation is not as good as it might seem. Crisis is not over yet. The fact is that the adoption of the unpopular law was the main condition for receiving financial assistance from the EU. It’s no secret that Cyprus economy is having bad times, and without immediate cash infusions it may face default. Parliament unanimously (no votes "for") refused to accept the law and put himself in a very difficult situation. On the one hand, the EU partners would hardly be happy with Cypriot intractability. On the other, sensing a real threat to their deposits, foreign investors are likely to start withdrawing money from the country. As for the prospects of the property market in Cyprus, experts has no consensus. Some believe that investors will rush to withdraw money from banks and invest in real estate. In this regard, Cyprus porperty market expects a small (within 5%) growth. But it is in the best case. In the worst, investors can completely lose confidence in the Cyprus economy, and flee in a less warm, but more peaceful place. Cyprus crysis could trigger a chain reaction of distrust in banks across the EU. After all, the tax reform was initiated by Brussels. And if they think it’s possible to impose taxes for investors of Cypriot banks, what can stop them from doing the same with Italian o spanish banks? In this regard ee24.ru experts predict the increasing of interest to more safe assets. Real estate is definitely such an asset. First of all, investors will focus on countries with the most stable economic situation. These countries are - France, Germany, Great Britain and Switzerland. Germany is the most popular country among investors.  According to consulting company CBRE German property market is considered to be the most reliable and profitable. There has been an increase in popularity of commercial property, mainly industrial and office space. You can buy a 70 m² commercial premises in Berlin for €60-80 thousand on average. Wealthy investors also invest in the French Riviera property, where the extremly high prices for luxury housing are compensated by high demand and income from rent. For example, luxury 70 m² apartments in Cannes can be purchased for around €450,000. Prices for villa in Saint Tropez start at a million euros. Portugal could attract investors with simplified procedure for obtainig residence permit and government assistance in the development of the resort regions of the country. Apartment of 70 m² in the tourist area of Algarve is available for €100-150 thousand. Villa of 200 m² in the same region will cost about €250-300 thousand Russian investors may be interested in the real estate market in Finland. There has been the rise in prices associated with the increase in the tax on real estate transactions from 1,6% to 2%. Compared to last year sales growth in this country reached 20%. Property prices in Finland start with minimum €30-45 thousand for an apartment of 35 m² in South Karelia and end with several millions euros for a villa with its own beach on Lake Saimaa.