Within the European Union, house prices have increased by 1 per cent in the first quarter of this year compared with the fourth quarter of 2013.
What Does This Mean?
However, in the Eurozone area they fell by 0.3 per cent, according to figures released with the latest House Price Index from Eurostat, the EU’s official statistical office.
From the EU member states for which data was made available, the biggest annual falls in house prices in the first quarter of 2014 were witnessed in Croatia, with prices falling by 9.7 per cent, whilst in Slovenia prices declined by 6.6 per cent and in Cyprus 5.7 per cent.
The highest price rises were in Estonia, which saw annual growth of 17.5 per cent, followed by Latvia where prices increased by 10.4 per cent and the United Kingdom with rises of 8 per cent.
There was positive economic news for some of the European property markets that have been hit the hardest by the economic downturn. In Spain, for example, the quarterly decline in prices has slowed to just 0.3 per cent and in Ireland the drop is down to 1.2 per cent, whilst Portugal recorded a quarter on quarter increase of 1.3 per cent.
Compared with prices from the first quarter of 2013, prices in Spain are down 1.6 per cent, in Portugal they are up 4 per cent, and in Ireland they are up 7.8 per cent.
Meanwhile, a different report released by Moody’s Analytics suggests that the highest growth rates among European metropolitan areas are likely to be recorded by those who have experienced deep downturns since the global financial crisis.
According to the report, the best growth areas are large metropolitan cities such as Rome, Milan, Manchester and Madrid. Smaller cities, for example Dublin and Copenhagen that also suffered deep recessions during the financial crisis will also see good growth opportunities.
“Thanks to a combination of wage cuts with other structural changes, labour markets in Spain and Portugal are now quite competitive and should enjoy strong job growth in coming years as the economy improves,” stated Steve Cochrane, managing director at Moody’s analytics and chief author of the report.
He did add however, that in London and German metropolitan areas growth will slow in 2015 and 2016 as they edge back from the recovery years towards longer term potential growth rates.
“Some of the medium sized metro areas, such as Zurich, Stockholm or Toulouse are very competitive and have strong growth prospects over the coming years. As the European economy improves, job growth will accelerate in many of these tier 2 metro areas, particularly those with multiple industries,” explained Petr Zemcik, director of European economics at Moody’s analytics, and co-author of the report.
Overall, the Moody’s report suggests that they expect a faster acceleration of office using industries in the coming few years as the economic recovery begins to spread across a broader area of Europe. “Job growth in Europe may slow as the area’s financial service industry becomes cost conscious. But elsewhere, the growth of office using employment will remain stable or accelerate, as in a number of French metro areas,” said Zemcik.
Bradley shore is an experienced property market blogger, his main interest is the Spanish property market as you can see from his recent work for altavista properties. He writes freelance but would like a full time author role.