Euro Zone Sees House Prices Rise | Chappaqua NY Homes

Euro-zone house prices rose slightly in the three months to June, the European statistical agency Eurostat said on Thursday, in another indication that the currency area’s economy is slowly mending.

Separate national figures released since June suggest the rise may have continued in recent months, with Dutch and Irish prices rising in July and August. Eurostat has only recently begun issuing the euro-zone data on housing prices.

House prices across the 17-country euro zone were 0.3% higher in the second quarter of this year compared with the first three months, although they were still 2.2% lower than in the second quarter of 2012. The quarterly gain was the first since the second quarter of 2012, when prices rose 0.1%.

House prices in the euro zone are still 5.5% below the peak reached five years ago, according to Eurostat. Home prices plummeted in some countries as the impact of the 2008’s global financial crisis caused banks to reduce mortgage lending and many people lost their jobs. Now, with the economy emerging from an 18-month-long recession in the second quarter, conditions are beginning to change.

“The economies which are showing reasonable strength at the moment are beginning to see their housing markets improve,” said Professor Michael Ball, housing expert and professor of urban and property economics at Henley Business School at Reading University in the U.K. “There is evidence of economic growth, rising jobs and mortgage availability is quite good, and above all mortgage interest rates remain quite low.”

Rising house prices make homeowners feel wealthier and more willing to spend. They also reduce the risk that banks will suffer losses on their mortgage loans.

Nevertheless Mr. Ball advocated caution. “One quarter of rising prices doesn’t make a boom, and in real terms prices are still falling in many countries,” he said.




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