According to estimations, most of the European national economies dropped by 2 to 5% in 2009. However, the situation got better towards the end of last year in spite of the plunge of the economy in early 2009 by 1.5% in just one quarter.
France and Germany announced the end of the recession in the second quarter. Now, that the worst seems to have gone, the experts expect the national economies in most of the European countries to grow in 2010.

What happened with investors?

In the first 3 quarters of last year, 41 billion Euros were invested in the European real estate market. The growth recorded was a steady one, although during the first quarter of 2009, real estate investments in Europe barely reached the amount of 12 billion Euros.
The representatives of CB Richard Ellis think that the statistics will show that the growing trend was present also in the last three months of 2009. Thus, it is very likely that the annual amount of the investments made last year in the European real estate market will reach 60 billion Euros. However, this will mean that the real estate investments in Europe for 2009 fell by 50% in comparison with 2008.
“The recent growth of the investments prove that many investors assume that the European market is nearing the lowest level it can get to, and in some cases this stage has passed. However, there is still fear that the economic growth will be a slow one, having an influence on the labour market, declared last year Michael Haddock, director of EMEA Capital Markets Research, CB Richard Ellis.
In spite of the fact that there is the possibility for the transactions to stay at a low level in the next period of time, the representatives of CB Richard Ellis believe that in 2010 the situation of the European real estate market will continue to improve. The fact that investors are interested mainly in modern buildings in convenient locations it’s a good sign showing that quality comes first.

How are investors going to act in the European countries?

In the last two years, the value of the real estate properties and investment activity fell dramatically in the countries that experienced a real estate boom. These are Spain, Ireland and Central and Eastern European countries.
A comparison between 2009 and 2008 shows that the northern countries and Central and Eastern European countries have experienced the largest decrease of investments, i.e. 80%. Therefore, in 2010 the investors will be very cautious on these markets.
The representatives of CB Richard Ellis expect real estate investments to increase on Great Britain market, which has a lower growth rate in comparison with other European countries, although it recorded an important growth. Germany, which recorded an outstanding increase of transactions in 2009, could have one of the swiftest growth paces in 2010. In France, investors' demand is high, but the increase of the number of transactions will not be very high due to the limited building inventory.