A Difficult Year for CEE’s Real Estate Sector

The region as a whole was confronted with a flight of foreign capital and investment is likely to remain low for some time. However, three markets in the region have proven to be very resilient in the current economic environment. The first one is Poland, which has avoided recession entirely. Its economy is less reliant on exports and employment has held up better than expected, supporting domestic demand.
The Czech Republic is also on a good track, emerging from a relatively short and shallow recession, while Turkey has weathered the storm better than most and benefiting from its strong population growth and strategic geographic positioning, it is likely to become the new logistical hub between Europe and the East. “Elsewhere in the region though, the real-estate sector was hard hit with property values and occupancy rates falling fast. That is also the case of Romania, which saw a decline in real-estate prices and transactions and the local market is only now beginning to experience a thaw”, said Brian Arnold (photo), Tax and Legal Services Partner with PricewaterhouseCoopers Romania. With some credit easing and property values stabilising, Europe’s real estate industry will see some improvement in 2010, but still faces a ‘long, slow haul’ to recovery.