House prices are falling in Europe, but not for long

According to Eurostat, house prices in the eurozone fell by 1.7% year-on-year and in the European Union by 1.1% in the second quarter of 2023.

The long-term trend in Europe's real estate market is changing: On average, homes cost less than they did last year, but quarterly figures suggest the decline may not last. The value of European homes fell in the second quarter of 2023 compared with the same period last year - the first time since 2014 - according to Eurostat, the European Union's statistics office. The house value index fell by 1.7% in the eurozone and 1.1% in the EU in the second quarter of 2023 compared with the same period a year earlier. These figures follow''after annualized increases of 0.4% and 0.8% in the euro area and EU, respectively, registered in the first quarter of this year. However, prices started to rise quarter-on-quarter: by 0.1% in the euro area and 0.3% in the EU between April and June 2023. Since 2022 itself, housing costs have fallen for two consecutive quarters: by 1.4% in the fourth quarter of 2022 and by 0.7% in the first quarter of this year, before seeing a slight increase in the second quarter of 2023.

Which countries experienced the largest price declines?

Nine EU countries saw house prices fall in the second quarter of 2023 compared to the previous year, but in the other 17 member states house prices continue to rise. The largest annual decline was recorded in Germany at 9.9%, followed by''followed by Denmark - 7.6% and Sweden - 6.8%. Croatia experienced the largest increase in house prices with 13.7%, followed by Bulgaria with 10.7% and Lithuania with 9.4%.

The cost of rent continues to rise steadily.

In the second quarter of 2023, rents in the EU rose by 0.7% compared to the previous three months.