The migrant crisis is the greatest threat to European real estate markets, according to Allianz chief economist Michael Heise.
His view contradicts statements from other economists in recent weeks who believe plunging oil prices and instability in global stock markets are most likely to cause ripples in real estate.
Heise, along with fellow panellist and former journalist Tim Marshall, was speaking at the ULI Europe conference in Paris.
The pair agreed that increasing pressure from immigrants from Syria and sub-Saharan Africa was more likely to shift economic and political patterns in a more dangerous direction.
With oil prices unlikely to rise again over the coming nine to 12 months, Heise said prices would only rise “once the damage has been done to Saudi Arabia’s [production] rivals, once the alternatives and the expensive exploration projects become difficult in the long term, then we will start seeing oil prices rise again.”
Therefore, he said, it was increasing pressure on governments to house and pay for an expected higher number of migrants that would cause grave economic instability across the Continent.
Its emotional effect was even expected to create a swing towards a yes vote for Brexit. “Brexit would be a big shock to the EU and a big loss of power to them [the UK],” said Heise, although he stopped short of saying it could spell an end to the euro or European unity.
The effect of falling oil prices, while harmful for producers, would be balanced by rising consumer spending from lower prices at the tills, he said.
Heise and Marshall believe 2016 will see an increase in the number of migrants moving through Europe, initially from Greece and the east, but increasingly through Libya and into Italy.
To send feedback, email mike.cobb@estatesgazette.com or tweet @MikeCobbEG or @estatesgazette
