The European real estate market in comparison
We just jumped into the year 2020 and curious to know how the real estate market in Europe was doing last year? Maybe we can find a tendency that is a must-know for our real estate strategy.
When making my research I came across a very interesting report that really opened my eyes to a few surprising facts regarding the real estate in Europe. I can recommend this to everybody to have a read.
Property Index – Overview of European Residential Markets
https://www2.deloitte.com/content/dam/Deloitte/de/Documents/real-estate/property-index-2019-2.pdf
Also, they will regularly post new reports – so you can keep up with new developments. “Data is the new gold”, so they say and I believe they are right. Acting according to the data provided can give you a big advantage.
Here are some results from this report I found very useful.
Since 2015, growing prices were seen in 15 (from a total of 16 EU countries). Italy being the only exception. There, property prices have been falling gently but little by little for years.
The typical annual growth in European property purchase prices has been 5 percent over the past three years.
In Eastern European countries (the likes of Hungary or the Czech Republic) and in Portugal, however, this increase was almost twice as high, which makes it increasingly problematic for people in these countries to acquire real estate in view of the lower income levels. In Eastern Europe the price growth may be seen as catch-up growth. Also, price developments are motivated in particular by the low interest rate environment. The “cheap” money fuels the property prices on one side, but also increases debt on the other.
The purchase price index between urban property prices and those in the countryside continue to separate and continue to show the ever more differing development of purchase prices between urban and rural regions. Just to look at one example, property prices in German cities such as Berlin, Frankfurt and Hamburg exceed the national average by half; Munich has the highest German value at 130 percent. Looking at Europe as a whole, Munich is not the only one: in a European comparison Paris and Lisbon (both about 220% above average) and London (198%) show an even more extreme development.
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