House prices fell in 15 Member States between the 4th quarter of 2022 and the previous quarter. Portugal is the exception.
Houses to buy in the European Union (EU) - and in Portugal - have recorded a sharp rise in prices in the last ten years. But the economic context has changed a lot in recent months: the purchasing power of Europeans has decreased due to high inflation and housing loans have become much more expensive due to the increase in interest rates.
All these and other factors have cooled the demand for houses to buy in the final stretch of 2022. And, therefore, house prices fell 1.7% in the Eurozone between the fourth quarter of 2022 and the previous quarter, the largest decline recorded since the end of 2008. In Portugal, prices rose 1.1% between these two moments, according to Eurostat. Looking at the evolution of the cost of houses to buy between October and December 2022 and the previous three months, it is clear that:
The price of houses in the Eurozone had the largest decline since the fourth quarter of 2008 (-1.7%);
The price of housing in the EU fell by 1.9%, the biggest drop since the first quarter of 2009.
Eurostat data, published this Tuesday (April 4), also reveal that the house price index has receded in 15 Member States and stabilized in Italy. The largest falls were observed in Denmark (-6.5%), Germany (-5.0%) and Cyprus (-4.0%). In other countries, houses for sale became more expensive again at the end of 2022. The main price advances were observed in Croatia (4.7%), Romania (2.5%) and Lithuania (1.9%). Portugal is also part of this list: here the price of houses rose 1.1% between the third and four quarters of 2022, the data point out.
Already looking at the annual variation in the prices of houses for sale, it appears that there was an increase of 2.9% in the Eurozone and 3.6% in the EU, according to Eurostat. The year-on-year price of houses increased by more than 10% in seven Member States, including Portugal (11.3%), with the highest increases being recorded in Croatia (17.3%), Estonia (16.9%), Hungary (16.5%) and Lithuania (16.0%). On the other hand, house prices fell in Denmark (-6.5%), Sweden (-3.7%), Germany (-3.6%) and Finland (-2.3%). It is important to note that the rental market at European level seems more stable, since house rents continue to rise. In the fourth quarter of 2022, rents in the EU increased by 2.5% compared to the same period in 2021. And, in the chain variations, the rents maintained the upward trajectory (+0.6% compared to the third quarter of 2022).
Housing in Europe has become much more expensive over the last decade Over the last decade, both houses to buy and rent have become more expensive. But house prices rose more than rents in 18 EU countries between the fourth quarter of 2022 and 2010, according to the European statistical office. “During this period, the prices of homes to buy increased in 24 EU countries and decreased in three. They more than doubled in Estonia (+199%), Hungary (+174%), Lithuania (+142%), Luxembourg (+136%), Latvia (+133%), Austria (+126%) and the Czech Republic (+125%)”, reads the note published this Tuesday. In Portugal, housing prices rose about 80% between these two moments. The falls in the prices of homes to buy were observed in Greece (-14%) Italy (-9%) and Cyprus (-4%).
In rents, prices increased in 26 EU countries and decreased in Greece alone (-23%). The largest increases in house rents between 2010 and the end of 2022 were observed in Estonia (+216%) and Lithuania (+160%). In Portugal, houses for rent were about 30% more expensive in this period.
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Source: Idealista