How Europe ETFs Are Handling The Real Estate Collapse

After the spectacular collapse of the housing market, the European housing market is still plagued by the credit crunch and this may not leave much room for development in related E.U. real estate exchange traded funds (ETFs).

Investment in the housing market around Europe, most notably by United Kingdom denizens with equity, has left many buyers with little or sometimes no capital gains as property prices in Europe plummet, reports Anna Mikhailova for Times Online.

Many developers ran out of money and abandoned unfinished properties. Some more dubious overseas developers even conned gullible foreign investors into paying for projects that were probably not intended to be built in the first place.

Development in areas like emerging Europe were hit hardest. In Calabria, southern Italy, investors saw houses sequestered by local police after the developing region was halted under environmental reasons. Spain has also been rather unfortunate for foreign home owners with collapsing property companies, arbitrary government rules and plain fraud.

The new report issued by Mintel International, Consumer Reaction to the Credit Curnch-UK, seeks to answer questions regarding U.K. consumers and stress on market segments, according to Marketwire. It is seen that the credit crunch will create a prolonged recession, with the United Kingdom experiencing rising unemployment, repossessions and insolvencies. But falling inflation and base rates actually have been to the advantage of mortgage holders.

It is difficult to find the necessary debt financing for potentially $67.5 billion of equity in European Commercial real estate market deals, as stated by Global Real Estate Monitor for GlobeSt. Activity in European commercial real estate will probably be more temperate this year because of ongoing European economic troubles.

• iShares FTSE EPRA/NAREIT Developed EU Index (IFEU): down 20.8% year-to-date

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