Words: Ashley Rigg
Published: 19th December 2011
“You would have to be insane to buy there” Assetz
Stuart Law, CEO, of Assetz, one of the largest UK-based overseas property companies, has launched a stinging attack on the investment prospects of a number of countries within the Eurozone.
In an interview with Global edge, Law singled out Greek property as the one of the worst financial
Investment’s it would be possible to make in 2012.
“Although property prices in Greece have fallen and appear cheap, the Greek drachma will depreciate 60% when the country leaves the euro after the German and French elections. You would have to be insane to buy there,” he said.
Law is also down beat on the prospects for France and Spain and is planning to scale down his
French sales operations next year due to tighter mortgage conditions in the Eurozone.
“Banks in the Eurozone will cut lending drastically, particularly to overseas buyers. European banks are two years behind the UK in terms compliance with Basel III. They have to increase their liquidity ratios are they only have three choices: stop lending, recall existing loans or get cash from shareholders. If they don’t do these things, the banks get nationalised. The mortgage market in Europe next year will be re-run of 2008-2009 in the UK”.
Crazy French developers
Law plans to focus the company’s efforts outside the Eurozone in 2012.
“We have no plans to sell property in the Eurozone and we are winding down our French property business. Property developer prices are just too high. Net yields are now barely 4% and the response of French developers to a crisis is often to raise prices. It’s crazy”.
Comment: Lifestyle key in 2012
Although some will find Law’s comments inflammatory, his analysis of the sales prospects of pure investment products to UK buyers within the Eurozone is sound.
Political uncertainty combined with a huge contraction of credit could create a perfect storm. The good news is that the pure investment market for overseas property is small in comparison to lifestyle and it’s this market that will be key to success in 2012.
Creating or sourcing lifestyle products that tick all the boxes of a particular niche market has never been more important. “A millionaire lifestyle at an affordable price” could be the strategy to follow next year. Will 2012 be the year fractional finally takes off?
Source: Global edge
User Comments
As a fractional consultant with a direct sales arm we are actively taking on developments in these areas. We have just signed deals for ski properties in the French Alps and golf properties in Spain and Ireland as we are also predicting that 2012 is the year for the lifestyle purchaser especially on a fractional basis. We are however catering for the clients that don't trust the Eurozone with developments in North Cyprus, Bali, Greneda and Dubai coming on stream the first quarter of 2012. We have had a good year in 2011 and are predicting and even better one for 2012.
Paul Anderson,
Fractions Abroad Ltd