woensdag 18 maart 2015

Time To Go Into European Real Estate

Real estate in Europe hasn't been doing so well last year, with the exception of the U.K. and Germany (see chart below from The Economist). That will change in 2015.

I believe that the tide has turned when the ECB decided to do "whatever it takes" to defend the euro and proposed their expanded quantitative easing strategy in January 2015. Since 2012 and especially since that announcement in 2015, government bond yields in Europe have been declining at a supernatural rate, especially in Spain (see chart below from Yardeni). We are now at a point where some maturities have negative bond yields.

What is most interesting to note is that bond and bank deposit rates are very low at this moment, while the commercial real estate yields are very high. This translates into a huge spread compared to the historic average and that is why real estate in Europe is a very good place to invest in right now.

Read on here.

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