ECB: House prices are robust across Germany, France and Austria

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ECB: House prices are robust across Germany, France and Austria

Frankfurt (Germany), Jun 21 (EFE) .- Aggregate house prices remain “robust” during the coronavirus pandemic due to the sharp rise in Germany, France and Austria, according to an article in the economic bulletin of the European Central Bank ( BCE), published this Monday.

The year-on-year growth in prices increased from 4.3% at the end of 2019 to 5.8% in the last quarter of 2020, the highest growth since mid-2007, adds Moreno Roma in the ECB bulletin.

But prices vary widely within the euro area and have risen sharply in Germany, France and Austria, especially for existing homes, as the 5% year-on-year contraction in housing investment in 2020 has weighed on supply. of new housing and increased the prices of existing houses.

“The contraction in building permit authorizations seen throughout 2020 could prolong this phenomenon and thus continue to support housing prices,” predicts Rome.

Additionally, existing home prices rise more than new construction because demand is partially redirected to existing housing to make up for the scarce supply of new housing.

As a result, existing home prices have been “especially dynamic” during the pandemic and have contributed significantly to increases in house prices, the ECB newsletter article adds.

Existing house prices rose 0.8 percentage points more than new house prices in the euro area last year, according to Eurostat data.

Germany, France and the Netherlands account for 73% of the increase in house prices in the last quarter of 2020 in all countries that share the euro.

This percentage exceeds its weight in the housing price index.

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