© Robert Bergqvist
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The main reason for weakening housing market within the Euro area is, of course, a slow economic recovery together with the unemployment rate. Therefore, the households continue to be under pressure and uncertainties about the future increase. Moreover, the credit market also plays an important role, because we have seen the banking system in the Euro area is trying to deal with the challenging economic environment. These factors have an impact on the supply within the housing market.
Do you think that the current economic situation could put the real estate market in a risk of price bubble?
Considering the Euro area, the price bubble is unlikely to appear. However, there is a risk that low interest rate environment could possibly create an overheated housing market in some specific countries. We have seen a correction in a couple of countries which are now back to the fundamental levels. Looking on the future perspective, I consider that the low interest rate environment should provide some support to the real estate market if the interest rate will remain at a lower level, compared to the situation we had prior to the crisis. In general, there are not a lot of concerns about the housing market whatsoever.
What is your forecast for the EUR/USD, GBP/USD and EUR/JPY for the Q4 and the end of the year?
We do expect the European Central bank to do more, in order to support economic growth, and also try to avoid these disinflationary forces. That should also have a negative impact on the Euro, which is good for the Euro zone exporters. Hence, we believe that the EUR/USD should move downwards and settle at 1.30 at the end of the year. The GBP/USD should be at around 1.71 in Q4 and the EUR/JPY should be at 1.35 at the end of 2014.