The survey, of more than 600 leading real estate professionals across Europe, found İstanbul was number one for investment and development. The popularity of the city is mainly attributed to its young, growing population and strong economic growth prospects. The survey states, “Turkey's appeal is based on a long-term view of the future,” and says that with consumer spending on the rise, retail development in the country has high potential.
In addition to İstanbul, the survey also found hotspots in the European real estate market to be Munich, due to its having the lowest rates of unemployment in Germany, and Warsaw, an Eastern European financial center. Berlin and Stockholm ranked in the top five as well, while London fell from second in 2011 to 10th in 2012. Moscow made the top 10 for the first time.
The survey predicts that financing of the real estate sector will suffer more than other sectors due to measures taken by banks to tackle regulatory and macroeconomic pressures. It said deleveraging will not free up capital for fresh property lending, while the debt will become more short-term and expensive, and the need to find alternative sources of funding will become imperative. Fifty-two percent of survey takers believe loans will be substantially less available in 2012.
John Forbes, a real estate funds partner at PwC and author of the report, said: “Debt will be the main story of 2012. There is general pessimism regarding the availability of debt this year, and significantly, lenders are the gloomiest of all.”
The survey suggests opportunities will be created for some, in particular for equity investors who are less dependent on loans, adding that 65 percent of the respondents believe equity will be more available in 2012.
