ie ireland.
i was just in cyprus and everyone is talking about the prices going up when cyprus switches to the euro.
2007-01-02 23:37:05 · 6 answers · asked by curlyloxx 3 in Social Science ➔ Economics
I think there are 2 main factors.
1 Economic Discipline
Not every country that wishes to do so can switch to the Euro. To be accepted as part of the 'Euro Club', and economy has to have passed a set of criteria involving economic targets such as inflation.
Any country that switches to the Euro is therefore sending a strong signal of economic discipline, and this tends to be seen as a plus for the future prospects of the economy; more outsiders are likely to invest in that country, and therefore property prices go up.
2 Trade and Tourism Effect
It's always easier to trade with or to visit a country that shares the same currency. The hassles and uncerntainties regarding currency exchanges simply do not exist anymore. Therefore trade and tourism go up, land becomes more valuable whether as an investment (as people get wealthier), or for tourism purposes (hotels...), or as foreigners enter a real estate market they are more familiar with.
WHile the first effect would tend to affect real estate prices across the board, the second effect could have more local effects, with huge increases in desirable plots (say next to the beach or an area with scenic views) as opposed to less desirable ones (say in the middle of nowhere with no facilities...).
2007-01-04 07:10:04 · answer #1 · answered by ekonomix 5 · 0⤊ 0⤋
It's something that is the focus of much conversation (especially in bulgaria and romania who are just joining). The EU commission demand a number of criteria be met by the country to join the EU, this in itself increases the desirability of the country and property there. Secondly there is an influx of EU money and in theory big EU businesses who wouldn't have gone near the country before.
Glass half full people see all this as guaranteed and therefore the countries economy will rise, dragging house prices with it.
Glass half empty people think it is unlikely to actually come about and that the economy and property prices will remain the same.
2007-01-03 07:48:10 · answer #2 · answered by evilted_2 2 · 0⤊ 0⤋
There may be no link. Ireland was and is growing faster than any other EU nation and are inflation was quite high to begin with. However, as far as i know Cyprus is not in the Euro, they just joined the EU.
2007-01-05 12:30:27 · answer #3 · answered by eorpach_agus_eireannach 5 · 0⤊ 0⤋
Switching to Euro means the country coming under increased trade and commerce which drives the price of Real Estate to meet the demand for expansion of existing infrastructure and business. The currency change as it is not the culprit but the by product of the country coming under Eurozone combined trade and commerce.
2007-01-03 13:15:51 · answer #4 · answered by Mathew C 5 · 0⤊ 0⤋
When a country joins Euro, its easier for other Euro citizens to visit that particular country; immigration laws are different, u don't need a visa to go there and you have more rights when you are in that country.
A lot of U.K. citizens are buying properties aborad, mostly in Euro countries. This is because they can easily travel to these countries without much hassle in regards to their passport and it is easier for them to buy in Euro countries etc etc.
N as a lot of people are buying more houses abroad these days(as a 2nd home, as investment etc), this drives the price increase, especially if its a sunny country.
hope it makes it clearer.
2007-01-03 07:54:18 · answer #5 · answered by Anonymous · 0⤊ 0⤋
It should not make a difference. However, it could be that Cyprus did not get a good exchange rate and they did not get enough Eurose when they converted. Sounds like somone is making money somewhere though.
2007-01-03 07:47:24 · answer #6 · answered by Alice S 6 · 0⤊ 0⤋