Steady but sure growth for Eu­ro­zone prop­erty mar­kets, France lag­ging

Financial Mirror (Cyprus) - - FRONT PAGE -

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.

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