Housing markets and economies are in line to see the next hit by the credit crunch in areas such as Eastern Europe. Locations that are likely to be hit the most include Hungary, Czech Republic and Poland – all prime locations for property purchases. Some locations may be less hurt by a credit crunch though. For example, Russia should be cushioned from such a blow.
According to Morgan Stanley, as reported by Reuters, "Given a deteriorating outlook for some CEE and South Eastern Europe (SEE) markets, we view the Russian property market as offering better new term growth and yield prospects."
While these areas are likely to see some pain, they continue to be one of the best for overseas property investing. In fact, countries that should be more often considered by UK investors are not Spain and France, but Eastern European countries.
For example, purchasing property in areas such as Cape Verde, Montenegro, Poland, Hungary, and Morocco are all solid investment decisions, while purchasing in Spain and France are likely to be less beneficial to property growth and potential. There is more growth possible in the Eastern European countries than in other areas.
The credit crunch is affecting many countries around the world. As banks pull in the reins on their lending criteria requiring more money down and lending far less, it becomes increasingly important for property investors to seek out more stable property investment markets.