European property market picking up, says RICS report

The majority of Europe’s residential property markets are undergoing recovery, though some are in dire straits still, while others are positively booming, according to a new report.

Hot north, cold south is the simple geographic description of Europe’s housing markets with the Nordic countries, Germany and its southern neighbours, France and Belgium all experiencing rises in real house prices in 2010, the new European Housing Review 2011 from the Royal Institution of Chartered Surveyors shows. Ireland, Hungary and Cyprus experienced falls while Spain, Greece and Portugal saw moderate falls despite their economic difficulties. Prices were slightly down in the UK, Netherlands, Poland and Italy and the Baltic States were recovering from their major crashes.

Unlike previous housing market upswings, prices increases are leading other market indicators, such as transactions and house building but mortgage constraints are affecting many markets. But interest rates are low and there is little evidence of substantial mortgage debt deleveraging by households in countries with high levels of mortgage debt.

The report also says that house building is down all across Europe and is severely lagging recovery in most places. According to the report’s author, Michael Ball, Professor of Urban and Property Economics in the School of Real Estate and Planning, University of Reading, it does not look as though Europe as a whole is following the USA into many years of housing market mire.

‘But, all the same, there are worrying aspects to the recovery. Perhaps that is unsurprising given the scale of the financial crisis and the more European specific sovereign wealth crisis that followed. Nevertheless, there are several distinctive issues over and above the normal uncertainties that surround the initial phase of an upturn,’ he said.

Source: Property Wire

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