Steady but sure growth for Eurozone property markets, France lagging
There has been a lot of talk about how the Eurozone economy is still taking its time to pick up, with the UK – which is outside – seeing a stronger recovery, but Ireland and Spain are also seeing solid growth.
It is a similar story when it comes to the housing markets, although it is very much a case of some countries doing better than others. Overall, house prices in the Euro area increased by 2.3% year on year in the third quarter of 2015 and by 3.1% in the European Union, according to figures from Eurostat, the European Commission’s statistics office.
Year on year prices increased the most in Sweden with growth of 13.7%, followed by Austria up 9.3%, Ireland up 8% and Denmark up 7.2%. The biggest decline in house prices was in Latvia with a fall of 7.6%, followed by Croatia down 3%, Italy down 2.3% and France down 1.2%.
The highest quarterly increases were in Malta with a growth of 6.2%, followed by Ireland up 4.5%, Austria up 4.1%, and Sweden and the United Kingdom both up 3.9%. The largest quarterly fall was in Hungry where prices were down 5.9%, Slovenia down 3.5% and Estonia down 1.9%. The index figures show that prices are growing year on year across most of the Eurozone area. France is perhaps a surprise coming in as one of the main countries, along with Italy that are popular with overseas buyers to see prices still falling. However, the rate of price falls has slowed in France and prices were up by 1.7% in the third quarter of 2015, compared to a fall of 2% in the fourth quarter of 2014, indicating that the market is slowly coming back in France.
Indeed, figures from Notaires, which exclude new builds, show that overall house prices in France increased by 0.4% in the final quarter of 2015 while apartment prices rose 0.3% in metropolitan areas, but are down 1.6% and 1.9% year on year, respectively. In Paris and the surrounding area house prices increased by 1% in the third quarter of 2015 and apartment prices were up by 0.7%, House prices are now down 1.1% and 1.3% year on year, respectively. In rural areas house prices increased by 0.2% quarter on quarter but apartment prices fell by 0.1%.
The Notaires predict a stable market in the coming months with apartment prices up around 0.4% and house prices by 1.4% by the end of the first quarter. The report adds that a year on year rise in sales of 12.5% up to the end of November 2015 bodes well for the market in 2016 as this level of sales has not been seen since spring 2012.
It is also looking good for the Spanish property market. Sales in Spain have increased for 18 months in a row, according to data from Notaires. Prices are still a bit over the place and very much depend on location, but this is a sign of a steady recovery and there will always be a big discrepancy in terms of price in locations that are popular and rural areas where foreign buyers, for example, do not feature.
It is also a good sign that in Ireland house prices outside of Dublin are now recovering well and the strong, some might say worrying, steep rises of 2014 have now settled down to more solid and steady growth. Although prices in Ireland, like Spain and France, are still some way below the peaks of the market just before the global economic downturn of 2007. Steady but sure must be the order of the day.