European housing markets go from strength to strength

04 March 2005
Housing markets across Europe have grown stronger over the past year, according to a review published yesterday by the Royal Institute of Chartered Surveyors (RICS).

The European Housing Review 2005 shows significant growth in house prices, transactions, mortgages and housebuilding in most European countries, with only Austria and Hungary witnessing a relatively poor year.

France, Spain and Ireland all maintained double-digit house price inflation rates, whilst Germany's stagnant market was buoyed by increased mortgage demands on the part of owner-occupiers.

The UK was the only country to see its housing market decline in the latter part of the year, owing to a series of interest rate rises.

"Very low interest rates and increased competitive pressures in the mortgage industry are delivering solid growth in lending, which is likely to continue through much of 2005," said Milan Khatri, chief economist at the RICS.

The 2005 report is the first to cover the ten new EU accession countries, with in-depth chapters on Hungary and Poland and an overview of the remaining eight.

The housing markets in these countries are more affordable but also precarious, and the report urges caution on the part of foreign investors.

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