2021-09-16-牛津经济研究院-Eurozone_House_price_growth_on_track_to_reach_a_30-year_high_4页_203kb

House Price Growth in Eurozone Rises Sharply

Eurozone house prices are recording strong growth driven by easy financial conditions and a pandemic shock that affected non-homebuying sectors. Prices are expected to reach a 30-year high, with growth surging to 8% year-over-year in Q4 2021 and over 7% for the full year 2021, up from previous forecasts. Countries like the Netherlands and Germany lead with double-digit increases, while others show substantial gains.

Key factors include low mortgage rates, concentrated pandemic labor-market impacts on low-income groups, high demand for owner-occupied housing, and excess savings. The quick labor market recovery and supportive policies are sustaining this trend, with bank lending for houses reaching a 13-year high.

However, medium-term risks exist as interest rates may rise gradually and supply increases, potentially moderating growth to below 3% p.a. by 2023-2025. The Netherlands and Germany face higher valuation risks, with prices 17% and nearly 15% above long-term trends, respectively. Historically low growth in Italy contrasts with stronger performances elsewhere.

Countries with the highest risk of price reversal include the Netherlands and Germany, but widespread declines are rare, typical only during past crises. Overall, the outlook suggests continued volatility.