Europe’s house price boom continues unabated
Six of the ten strongest housing markets in our global survey were in Europe. House prices rose in 17 of the 22 European housing markets for which figures were available during the year to Q2 2016.
Romania is now the strongest housing market in Europe and the third best performer in theglobal survey, amidst strong economic growth and the government’s focus on rebuilding public trust. The average selling price of apartments rose by 10.1% during the year to Q2 2016, from y-o-y rises of 11.55% in Q1 2016, 7.74% in Q4 2015, 7.57% in Q3 2015, and 4.83% in Q2 2015. House prices increased 0.77% q-o-q in Q2 2016.
Germany’s housing market remains strong, mainly due to housing supply shortages and strong economic fundamentals. The price index for apartments rose by 9.89% during the year to Q2 2016, from annual rises of 6.25% in Q1 2016, 7.62% in Q4 2015, 4.3% in Q3 2015, 4.2% in Q2 2015, and 6.04% in Q1 2015. Apartment prices rose by 3.71% q-o-q in Q2 2016.
Turkey’s housing market remained robust, with house prices in Istanbul rising by 9.67% during the year to Q2 2016, after y-o-y increases of 12.2% in Q1 2016, 12.51% in Q4 2015, 13.05% in Q3 2015, 13.9% in Q2 2015, and 13.18% in Q1 2015. House prices increased 0.36% q-o-q in Q2 2016 (note however that the survey’s end-date preceded the July 2016 coup attempt). Turkey’s housing market was boosted by strong foreign investment and a growing population, despite a collapsing currency, dissatisfaction with the government, and geopolitical tensions.
Other strong European housing markets included Riga, Latvia, with house prices rising by 5.61% y-o-y in Q2 2016, followed by, the Slovak Republic (5.46%), the Netherlands (5.41%), Vilnius Lithuania (5.28%), and the UK (4.82%). All saw positive quarterly growth during the latest quarter. Also, all performed better in Q2 2016 compared to a year earlier.
European housing markets with minimal house price rises included Portugal, with house prices rising by 2.87% during the year to Q2 2016, Tallinn, Estonia (2.75%), Spain (2.22%), Norway (2.04%), Finland (0.92%), and Macedonia (0.72%). All, except Estonia and Macedonia, recorded positive quarterly growth during the latest quarter. All, except Estonia and Norway, showed better performance in Q2 2016 compared to a year earlier.
Russia remains the weakest housing market in our global survey, with residential property prices plunging by 12.46% y-o-y in Q2 2016, a little worse than last year’s decline of 11.13%. Russia’s house prices fell by 2.27% during the latest quarter. Russia’s housing market continues to suffer from the country’s financial crisis, largely unleashed by low oil prices, but also due to the intervention in Syria and the negative impact of the recent war with neighboring Ukraine.
Other European countries with minimal house price falls included Kiev, Ukrainewith house prices falling by 2.95% during the year to Q2 2016, Greece(1.95%), and Switzerland (-1.15%). All recorded negative quarterly price changes during the latest quarter (Ukraine, -1.58%; Greece, -2.1%; and Switzerland, -1.36%). Despite this, only Switzerland showed worse performance in Q2 2016 compared to a year earlier.
