The euro-zone recession shows few signs of easing and we have yet to see its full impact on European property values. At the aggregate level, capital values have been supported by further small falls in yields in some core markets and the strength of prime retail rents. Property values are likely to continue to hold up relatively well in economies such as Germany and Austria, where economic growth prospects are least problematic and where yields do not look excessively low. In Ireland, too, values finally seem to have reached a floor. But elsewhere the remainder of this year and next will be characterised by falling property values.
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