Spain And UK Lead Eurozone Property Price Rises
Over the past five years property prices in the UK have risen faster than in any other country in the eurozone with the exception of Spain.
A report from Halifax says that in that time, house prices in the UK have gone up by 90%, trailing only Spain where prices have doubled. The overall average for the UK and the Eurozone combined is less than half that seen in the UK and Spain at an average of 40% over the past five years.
The study shows that there are wide variations in property prices across the nations. Some have seen major growth where others have only seen minor rises. Behind Spain and the UK comes France with growth of 73%, then Ireland with 71%, Belgium with 60% and Greece with 56%. These strongly positive figures contrast sharply with a 7% rise seen in Portugal, 6% in Austria and a fall in German property prices of 5%.
The most popular holiday destination for Brits is Spain, and it is also the place where we most like to buy abroad. For anyone who has done so, they could well have seen their property value double in the last five years. However, this is tinged with a recent downturn in the Spanish property market as there have been reductions in many areas. The reasons behind this were an overheated market, oversupply of property and interest rate rises. Builders in the country have had some trouble as a result.
The Republic of Ireland has also had difficulties. A massive property boom has stagnated or seen falling prices with developers in trouble.
Is the same story about to unfold in the UK? Nationwide has warned that fallout from the US sub-prime crisis may not yet have had its full impact on the UK housing market.
Group economist at Halifax, Tim Crawford, said: “UK house prices have risen more rapidly than in its eurozone neighbours over the past five years. House price growth, however, has slowed in the past couple of years compared with the likes of Belgium and France recording bigger increases.”
Over in North America the price of a home has gone up more slowly than Europe, with an average increase of 36% in the US and Canada over the same period. The last 18 months, however, have actually seen a fall in property prices, and in the first quarter of 2007 there was an annual decrease of 1.3%.
Although Spain has seen a faster rate of growth in the last five years than the UK, property prices in Spain are still lower. The average there was £150,200 at the end of last year, whereas in the UK the average house price was £187,100. Prices for property in Ireland and the Netherlands are even higher, with averages of £209,300 and £190,900 respectively.
Owner-occupation rates in the UK are about 70%, and they’re higher in Spain at 82%. The Netherlands has an owner-occupation rate of 55%, and in Germany it is as low as 45%.
Tom Smith
19th September 2007
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