Barclays initiates European homebuilders as sentiment falls

Instone Real Estate SE

11/10/2022 11:11

** Barclays initiates the European homebuilding sector with
a negative 12-month industry view, as the cost-of-living crisis
and rapidly increasing mortgage rates weigh on consumer
sentiment
    ** It says more incentives could be required to attract
customers, making it harder to increase house prices further to
protect profit margins
    ** But some companies are more resilient than expected, the
broker says, as it initiates Irish Glenveagh Properties  GLV.I 
and French Nexity  NEXI.PA  at "overweight"
    ** Barclays expects Glenveagh to ramp up its housing
production with supportive government policies and dynamic
demographic forecasts
    ** It expects Nexity to keep benefiting from some government
financial support and cautious lending conditions
    ** The broker recommends "underweight" on Germany's Instone
 INS2.DE , whose withdrawn FY outlook and subsequent profit
warning have eroded sentiment, and Spanish Neinor Homes
 HOME.MC , as its plan to build a large PRS platform "could be
less accretive than expected"
 (Reporting by Anastasiia Kozlova)
 ((Anastasiia.Kozlova@thomsonreuters.com))