In many parts of Europe local economies are still struggling to recover from the 2007/8 economic downturn. Indeed we only need to look at Spain to see the amount of repossessed properties from the downturn although thankfully many have now been resold. The recent ING International Survey Homes and Mortgages 2017 report casts a very interesting light on the European market and expectations in the short, medium and longer term.
The survey takes in 15,000 individuals from 15 different countries and enquiries about their attitudes to the housing market and how they expect house prices to perform in the future.
GENERAL EUROPEAN HOUSE PRICES
In general European house prices are expected to rise over the next 12 months with 59% of those who responded to the survey reflecting positive expectations. This is the first increase in two years with the figures for 2015 and 2016 stuck stubbornly at 56%. If we go back to 2014 only 53% of those who responded to the survey had expected house prices to increase over the following 12 month period. It may be a relatively small increase in confidence but thankfully there is finally some positive movement.
When you compare this to the US which saw an increase of two percentage points between 2016 and 2017 (57% and 59% respectively) and Australia where there was a six percentage point increase between 2016 and 2017 (50% and 56% respectively) this is not too bad.
COUNTRIES WITH HIGHEST EXPECTATIONS
Many will be surprised to learn that recent confidence in the Romanian housing market is highest among European countries. The corresponding figure in 2016 was 52% although this has jumped to a phenomenal 72% in 2017. So, a staggering 72% of those who responded expect the Romanian property market to increase over the next 12 months. Could we be seeing a re-emergence of emerging markets?
As we touched on above, there has been some improvement in the Spanish housing market over the last 12 months with a jump in confidence from 52% up to 66%. The corresponding figure for the Czech Republic is an increase of 13 percentage points from 52% up to 65%. Poland at 51%, France at 54% and Luxembourg had 86% are the next three markets which have shown a significant increase on the corresponding 2016 confidence figures.