Property deals in southern European countries once called PIGS (Portugal, Italy, Greece and Spain) rose sharply in 2017 due to improving economic conditions in the region, said broker Savills in a report.
Titled “Southern Europe: the PIGS are biting back”, the report said that positive economic growth, falling unemployment and renewed consumer confidence are luring investors back to the south of Europe.
Different stages of recovery in each of the four countries, means that there are different opportunities in each economy.
“Distressed assets are increasingly limited in Spain so pricing is not making sense to opportunistic buyers who are now looking elsewhere to Portugal and Greece,” said the report.
After years of weak activity, investment volume across Southern Europe increased by 277% in 2017 compared to the bottom low of 5.2 billion euros in 2012, mainly driven by growth in Spain, the report said.
Investment volume in Southern Europe totaled nearly 13.1 billion euros in the first three quarters of the year with the forecast for 2017 seen above 19 billion euros.
Global investors have caught onto the region. Cross border investors have been more active than domestic buyers accounting for 70% of the investment volume compared to the EU average of 52%.
In Greece, Savills expects rental yields to tighten further in 2018 before stabilizing towards the end of the year. In the other three countries, rental yields are seen as remaining stable in 2018.