House prices drop -1.4% q-o-q, rise 4.1% y-o-y

House prices in Cyprus, as measured by the House Price Index, dropped by -1.4% in the first quarter of 2017, compared to the last of 2016, but also increased by 4.1% compared to the same quarter of last year. The quarterly decrease was the third largest in the EU, according to Eurostat.

Meanwhile, house prices rose by 4.0% in the euro area and by 4.5% in the EU in the first quarter of 2017 compared with the same quarter of the previous year. Compared to the fourth quarter of 2016, house prices rose by 0.4% in the euro area and by 0.7% in the EU in the first quarter of 2017.

Among member states for which data are available, the highest annual increases in house prices in the first quarter of 2017 were in the Czech Republic (+12.8%), Lithuania (+10.2%) and Latvia (+10.1%), while prices fell in Croatia (0.4%) and Italy (-0.1%). Compared with the previous quarter, the highest increases were in the Czech Republic (+2.9%), Latvia (+2.8%) and Sweden (+2.5%), and the largest decreases in Malta (-5.4%), Slovakia (-2.4%) and Cyprus (1.4%). 36.7% on an annual basis, according to first estimates from Eurostat, the statistical office of the European Union.

Meanwhile in May compared with April, seasonally adjusted production in the construction sector decreased by 0.7% in the euro area (EA19) and by 1.1% in the EU28 . In April 2017, production in construction grew by 0.3% in the euro area and by 0.2% in the EU28. In May 2017 compared with May 2016, production in construction increased by 2.6% in the euro area and by 2.5% in the EU28.

The decrease of 0.7% in production in construction in the euro area in May 2017, compared with April 2017, is due to civil engineering falling by 0.9% and building construction by 0.6%.

In the EU28, the decrease of 1.1% is due to both building construction and civil engineering falling by 1.1%. The largest decreases in production in construction were recorded in Slovenia (-10.6%), Sweden (-7.1%) and Slovakia (-4.9%), and the highest increases in Hungary (+7.6%), Bulgaria (+3.6%) and Italy (+2.7%).

The increase of 2.6% in production in construction in the euro area in May 2017, compared with May 2016, is due to civil engineering rising by 2.8% and building construction by 2.5%. In the EU28, the increase of 2.5% is due to building construction rising by 2.9% and civil engineering by 1.6%.

The highest increases in production in construction were recorded in Hungary (+35.3%) and Bulgaria (+11.9%). Decreases were observed in Romania (-16.7%), Spain (-5.6%) and Slovakia (-2.1%).