Housing markets in the UK, Spain, France and Ireland saw double-digit growth in 2003, but none are expected to maintain such high rates of inflation during 2004, suggests the RICS European housing survey.
A study of last year’s house price increases across Europe reveals house prices in Belgium, Finland, Germany, Holland and Sweden all saw the same increases as the previous year.
Residential properties in Demark, Greece and Switzerland saw lower increases in the value of homes, as Greece saw its property prices increase by just 3% compared with 15% the previous year.
Although there are no figures available to indicate the average house price in different countries, evidence of the two-tier housing market at least suggests European countries are unlikely to provoke a property market crash, suggests RICS.
Moreover, at least 10% of all European properties are now recognised as second homes, says author of the RICS report, housing market economist Professor Michael Ball from the Business School, University of Reading.
At the same time, however, RICS data suggests demand for property is increasing when housebuilding accounts for less 1% of housing stock in most European countries.
Only Belgium, Finland, Greece, Ireland and Spain had more than 1% of housebuilding as a percentage of existing stock between 2000/01.
Contents of the RICS report highlights the status of each country’s social trends and economic conditions, to reveal how diverse housing markets are discouraging people from moving freely to work and live in other countries within Europe; and why several countries, such as Denmark, Holland and the UK, are so heavily mortgaged, says Milan Khatri, chief economist at RICS.
“This report shows that mortgage market structures alone do not explain differences in housing market trends. Differences in economic growth, house building, institutional and cultural factors all affect consumer behaviour.
“The current housing boom in many countries has been exaggerated by poor housing supply, particularly in urban areas, as markets have been prevented from operating freely because of constraining planning systems,” adds Khatri.IFAonline
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