The threat of further shocks from countries such as Italy, Portgual and Spain will hamper recovery of the European property market

Europe faces a two-tier property market | Business | The Guardian: "The threat of further shocks from countries such as Italy, Portgual and Spain will hamper recovery of the European property market, according to a new report.

Although London, Munich, Paris and Istanbul are set to be investment hotspots, a combination of new regulation, European austerity, the debt crisis and a weak lending market pose challenges for other cities, says the report by PricewaterhouseCoopers and the Urban Land Institute.

'Winning cities' such as London and Paris will continue to attract property investment, but a two-speed Europe will emerge in its property market. 'London and Paris are just big, transparent markets. You can be sure you will find opportunities there if you're looking for assets,' said PwC partner John Forbes, one of the report's authors.

On the other hand, there is a 'view that in London prime [property] has become overpriced and you can't necessarily make money by following the flow'.

Istanbul, adds the report, is attractive for different reasons, such as its young population, while Munich offers stability. By contrast, crisis-hit cities such as Dublin, Lisbon and Athens will only attract high-risk investors looking for bargains."

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