Morgan Stanley said on Thursday that the real estate stocks are expected to decline. He said that the European real estate stock would fall by 10% by the end of 2007. Edinburgh cut the rating on five property companies. That includes the largest one in Europe, which is the Land Securities Group.

Martin Allen, an analyst, said that the European real estate stocks have met the indexes since 2000. That is because investors were able to find options on stocks and bonds, which has pushed the property value.

On 2006, the Bloomberg real estate index has jumped by 22%. This is higher than the 11% gain in the Dow Jones Stoxx 500 index. Allen mentioned that the rising interest rates are cutting the liquidity from the global financial system. This has reduced the attraction of real estate.

Allen also mentioned that stock investor are becoming more skeptical because of the increasing number of share sales by property company. Morgan Stanley raised the targets for 2007 by 18%.

By M. Sese
http://realestatepress.org