European Housing Review 2009

6 March 2009

The European Housing Review 2009: The annual report published yesterday, by the Royal Institution of Chartered Surveyors (RICS), says that residential property prices in every European market fell by the end of 2008 when adjusted for inflation. However, a few countries such as Greece and the Netherlands were still slightly positive for the year as a whole after initial growth.

Professor Michael Ball, the author of the report, said: “The world financial crisis and economic downswing have hit European housing markets badly. Some countries, like Ireland and the UK, led the decline but by the last quarter of 2008 the effects had spread across Europe.

“There is greater synchronisation of housing market decline in Europe than has been seen in the past and there are going to be some tough times before marked recovery occurs.”

RICS said that any future recovery of European housing markets is reliant on the ability of European governments to cope with the lack of liquidity in the mortgage market as well as the economic slump as a whole.

Property in Estonia was the worst performing market, where average residential prices dropped 23% in 2008, followed by the UK, where prices fell 18%.

Other indicators of market activity in 2008 also showed that the rate of decline is still substantial. Housebuilding was 53% down from its peak in 2006. The volume of mortgage loans issued dropped by 48% in Q3 2008, compared to the same time in 2006.

Read the full RICS European Housing Review.