PROPERTY investors are moving into the European market again, despite the rise of global interest rates, according to the global property survey of the Royal Institution of Chartered Surveyors (RICS).

During the economic slowdown in the United States the smart money has been heading towards the more established European countries, which have recorded highs in economic growth in the second half of 2006 not seen since the dotcom boom. Even in the new EU states growth has been solid. Lack of supply in Eastern Europe is encouraging risk taking outside the more traditional areas.

Oliver Gilmartin, a senior economist at RICS, says that the demand for property in Europe is being accompanied by a decline in yields and that investors should be wary of buying cheaply in an untested market. He emphasises that, despite the possibility of short-term gains, investors should stick to fundamental factors.

DESPITE evidence that the established second home markets are in good health, the keen-eyed investor is always looking for the next new hotspot. Mongolia and now Albania and Libya have all been mentioned.

Huge EU investment in Albania, in preparation for entry in 2014, should begin to reassure anyone thinking of investing in the new Terranova development in Tirana, the capital, pictured left.

In Libya the Maltese-based company Corinthia is putting up a residential complex that should be ready at the end of 2008.

Libya has been going through a period of economic growth in the past few years with much foreign involvement.

Perhaps Tony Blair’s recent visit there should be seen in a different light. With Connaught Square nowhere near ready for his retirement, could the Blairs be looking for a place in the Libyan sun?

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