Grexit, Bond Market and Property

Most of the world’s population will be concerned by Alex Tsipras’s decision to call a referendum on the final bailout terms given to Greece by the countries creditors, which took weeks of talks to agree on. If Greece does exit the euro the obvious safe havens for its money will be in gold, the US dollar and the Great British Pound, which has positives and negatives depending on your personal circumstance or view; but many Real Estate professionals are concerned about the consequences a Grexit might have on real estate pricing in Europe which will mostly be determined by the reaction of the bond markets.

The European real estate prices have remained relatively stable during the Grexit saga, the bond market has been fairly ‘muted’ and the banks are now much stronger than during the last Greek referendum. This suggests most bond investors expect the Greeks to want to stay in the Euro and seemingly this is how Greece will proceed.

Ollie Salter, a surveyor at Morgan Pryce believes the consequence of a no vote will have a quite obvious, straight forward affect, “it will lead to poorer investor confidence and therefore lower levels of investment across Europe especially in the peripheral markets, there will be stronger investment in core ‘safe haven’ markets such as London and it is doubtful the long term impact will be too negative for the property industry. Also Interest rates will probably be kept lower for longer as well.”

There are a variety of opinions on Grexit and its backlash, potentially leading to the UK leaving the Eurozone from top economists – some positive some negative. Speculation is all very well but it think the reality is we will have to wait and see.

This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.