While a drop in the cost of property is delayed widespread in Europe, prices are expected to reverse grow in 2015 (+ 1%) and 2016 (+ 2%), according to the rating agency Standard & Poor’s (S & P). Certainly, in 2014, prices should gradually fall to 3.5% according to S & P, but the economic fundamentals of the French real estate market should bounce back in 2015 and supporting prices on the rise, according to the rating agency.
The severe lack of housing in some EU countries
To justify this statement, it highlights several features of the property market Europeen. First the structural housing shortage. Thus in 2013, “housing starts reached their lowest level since the year 2001 to 370,000 units, down 25% from the previous year. Even as the INSEE figures indicate that potential demand for housing is slightly lower 3500.000 per year. ”
This deficit of dwellings in Europe is particularly acute in large cities where the main activity centers are located as “London and Lausanne.” In such places, land is in dire need to build new housing.
Historically low interest rates
Then, these experts justify a future price increase by the level of gross interest rates historically low, which significantly drive the market upwards. Indeed, as often, “highly accommodative monetary policies of central banks support a recovery in real estate prices,” say they.
Moreover, price developments forecasts for the coming years will very much depend on the level of interest rates on housing loans. If they were to grow strongly, the risk of housing price decline should not be underestimated, said John Flanagan.
The appetite for home ownership
Finally, in Europe, although growth will resume slowly and that unemployment will decline slightly, the housing market remains supported by the strong attachment Europeans to real property. Especially since only 47% of households in Europe own, against 57% on average over the old continent.
Enough to supply the demand for housing in the coming years and consequently slight price increases for 2015 and 2016.
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