Foreign investment in the real estate market has been growing steadily in the UK economy for more than 20 years, to the point of creating the inverse problem of emptying the central districts, a direct consequence of the wealth effect generated by the overvaluation of the currency. This leads real estate developers to leave their own space empty rather than rented, with the aim of increasing the instrumental value of the property, giving up the progressive profitability of the asset and causing damage to the real economy, due to the decrease in available real estate assets. While there is a positive correlation between property prices and the current account, the long-term effects of Brexit could lead to a loss of attractiveness of the UK as a preferred location for real estate investments and cause a decline in foreign flows in the real estate market, opening the door to a crisis in the sector, the resilience of which is already being tested by the closure of several investment funds. Through the analysis of sector variables and related geopolitical and geo-economic issues, the work constitutes an attempt to outline the possible scenario of redistribution of foreign investment flows in the real estate sector and the development prospects of the main European countries and capitals potentially affected by their reallocation.

Real estate market and foeign investment flows. Could Brexit enable redistribution?

Simona Epasto
2018-01-01

Abstract

Foreign investment in the real estate market has been growing steadily in the UK economy for more than 20 years, to the point of creating the inverse problem of emptying the central districts, a direct consequence of the wealth effect generated by the overvaluation of the currency. This leads real estate developers to leave their own space empty rather than rented, with the aim of increasing the instrumental value of the property, giving up the progressive profitability of the asset and causing damage to the real economy, due to the decrease in available real estate assets. While there is a positive correlation between property prices and the current account, the long-term effects of Brexit could lead to a loss of attractiveness of the UK as a preferred location for real estate investments and cause a decline in foreign flows in the real estate market, opening the door to a crisis in the sector, the resilience of which is already being tested by the closure of several investment funds. Through the analysis of sector variables and related geopolitical and geo-economic issues, the work constitutes an attempt to outline the possible scenario of redistribution of foreign investment flows in the real estate sector and the development prospects of the main European countries and capitals potentially affected by their reallocation.
Geoprogress edition Novara
Internazionale
http://www.geoprogress.eu/wp-content/uploads/2020/02/GeoJ2018_I2_Epasto.pdf
File in questo prodotto:
File Dimensione Formato  
Epasto_Real-estate-market_2018.pdf

accesso aperto

Descrizione: Articolo principale
Tipologia: Versione editoriale (versione pubblicata con il layout dell'editore)
Licenza: DRM non definito
Dimensione 468.96 kB
Formato Adobe PDF
468.96 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11393/259431
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact