Eurozone | House price growth on track to reach a 30-year high
House price growth has gone from fast to faster across the eurozone, defying predictions of a pandemic-triggered downturn. This impressive momentum will continue through 2022. What you will learn:
We anticipate eurozone house price growth to surge to 8% y/y in Q4 2021 – a 30-year high. For the full year, we now forecast a similarly strong price performance, at over 7%, compared with under 6% a couple of months ago. We have also upgraded our 2022 forecast to over 6%, up from below 3%
The Netherlands and Germany will lead the charge, with house price growth peaking at around 15%. Rapid rises are also anticipated for Slovakia and Austria. For Spain, growth is likely to have resumed in Q2 2021 and we expect it to pick up solidly. This leaves Italy as the only eurozone country with sub-3% growth by end-2021.
Key factors behind the boom include easy financial conditions and the concentration of the pandemic-driven shock to labour-market segments that generally are less active in homebuying.