House prices down in Europe, but not in Portugal
According to the latest data from Eurostat, housing prices in the eurozone experienced a further 1.1% decline in the final quarter of 2023 compared to the preceding quarter. However, signs of recovery are emerging within the residential market, as this decrease was less pronounced than the 2.2% dip observed during the summer of 2023.
In Portugal, the trend contrasts with the broader eurozone, with housing prices continuing to climb, marking the fifth largest increase among EU nations.
Eurostat's statistical note reveals that house prices, as indicated by the House Price Index, dropped by 1.1% in the euro area while edging up by 0.2% in the European Union (EU) during the fourth quarter of 2023 compared to the same period the previous year. Concurrently, house rents across the EU saw a 3% uptick.
Despite marking the third consecutive annual decline in housing prices within the eurozone, a tentative recovery is perceptible, given the milder downturn relative to the sharp 2.2% decline witnessed in the summer of 2023, both in the euro area and the EU. This resurgence might be attributed to the market's growing optimism surrounding anticipated interest rate cuts by the European Central Bank (ECB) slated for June, expected to lower interest rates on housing loans. Notably, the dip in eurozone inflation to 2.4% in March, surpassing expectations, bolsters the case for this easing of monetary policy.
According to Eurostat, Portugal ranked fifth in the EU for increased house prices between Q4 2023 and the previous year.
Which regions are experiencing price declines? Among the 26 EU member states with available data (excluding Greece), eight nations reported a year-on-year drop in house prices, with Luxembourg (-14.4%), Germany (-7.1%), and Finland (-4.4%) witnessing the most significant decreases. Conversely, house prices rose in the remaining 18 EU countries during the final quarter of 2023 compared to the same period the previous year. Poland (13.0%), Bulgaria (10.1%), and Croatia (9.5%) reported the most substantial increases. Portugal also joins this group, with housing prices climbing by 7.8% between these two periods, ranking as the fifth largest increase among EU nations.
In comparison to the third quarter of 2023, house prices dipped by 0.7% in the euro area and 0.3% in the EU during the fourth quarter of 2023, while house rents increased by 0.6% across the 27 Member States during the same period.
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