Previous years’ economic recovery was in many ways an illusion and the world economy stands before an extended period of slow growth as businesses, households and governments consolidate their balance sheets. Politicians on both sides of the Atlantic Ocean will make the necessary decisions to avoid a deep global depression. The decisions will, however, be characterized by disagreement, skepticism and reluctance - and the market turbulence will persist throughout 2012.

The Nordic economies have shown strong development during recent years, and the region seems to stand out from the rest of the developed world with its strong growth and stable macroeconomic fundamentals. Low sovereign debts, transparent economies and consumers with sound personal finances give the region the rare combination of financial stability and growth.

The economies of the region are, however, highly exports dependent. The exports sectors represent around half the combined Nordic GDP – of which the majority goes to EU-countries - and it is through exports in combination with the global credit market that the global downturn will affect the region in 2012. However, the strong fundamentals and good governmental finances add resilience to the economies and growth will slightly pick up in 2013-2014. Due to the sluggish global economy domestic demand is expected to be an increasingly important growth engine in the region.

What then are the prospects for the future of the Nordic property market?

As domestic demand will be increasingly important, the economies will keep on growing despite the sluggish global economy. This will generate a stable employment and consumption development, and thereby stable cash flows for well-located properties of high quality in major cities. The property market also has an advantage over other types of asset in that it is less volatile than the stock market while producing more attractive yields than the bond market.

All in all, there are large amounts of capital around the world searching for safe returns. However, the options are few and investors have started to question old rules of thumb regarding what is safe and what is not. In this environment the Nordic property market seems an increasingly appealing investment choice.