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January 31, 2017

The price of real estate in the European Union increased by 4.3%

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Statistics data for the third quarter of 2016 confirmed the positive trend in residential real estate prices across the European Union, with an annual increase of 4.3%, the highest growth since 2008, according to Eurostat, the EU's statistical office. In Spain, this growth was similar to the European average, or by 4%. Therefore, this was the tenth consecutive quarter during which there was a positive trend in residential real estate prices in Spain.

In addition, Spain maintains a moderate rate of growth of housing prices, according to data provided by Eurostat for the third quarter of 2016, where houses and apartments are currently more expensive at 4%. During the past year, a rise in housing prices in Spain was between 6.3% in the first quarter and 3.8% in the second one.

Based on the above mentioned data, it can be said that Spain has already added ten consecutive quarters of the rise in real estate prices since last year, when the decline by -1.6% was recorded in the first quarter of 2014.

At the same time, throughout the European Union housing prices have achieved the greatest growth since 2008, with an increase by 4.3% compared to the same period of 2015, thus the trend, registered in the previous quarters, was actually changed.

Statistics data for the euro currency zone are more moderate. In the third quarter of last year, the value of residential property increased here by 3.4%, which was the largest increase since the first quarter of 2008.

Among European countries, the highest annual increase in the value of residential real estate was registared in Hungary, where prices increased by 11.6%, Latvia (10.8%) and Bulgaria (8.8%). On the contrary, housing prices fell in Cyprus by 3.3% and in Italy (-0.9%).

On the other hand, Eurostat statistics indicate that real estate investment in Europe will be unstoppable during 2017, despite all existent political uncertainties. This 2017 will witness many political and economic uncertainty, as the results of the referendum in the UK to leave the European Union or the presidential elections in the United States are already beginning to greatly influence other markets. Bank instability is also still high in Europe, and may appear in China; it should also be noticed that the elections in France, Germany and the Netherlands can bring new challenges for the future of the European Union.

However, the volume of investment in European commercial assets is expected to increase by 6% during this 2017, and therefore rents will rise by an average of 2% to 3%. In addition, the reports predict that Asia this year will overcome the North America as the main source of capital for Europe, although European countries compete with each other in pursuit of the best combination of growth and profitability.

In addition, nowadays, cities such as Madrid and Barcelona are already in the process of updating their existing properties to meet the existing demand from investors and buyers. It is very likely to happen that international investors who are looking to diversify risks, will seriously consider the possibilities of cooperation with local investors, for mutual benefits.

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