European Housing Market Update

The problems and presures of our housing market sometimes seem to be insurmountable and we feel we are all alone with our UK problems. This is not the case.
What is happening beyond our UK shores to the European housing markets.

France and the French Housing Market

• House prices have been in an expanding bubble for far too long.
• Values are up four times the increase in incomes over the last 15 years.
• Paris is unsustainably one of the top three most expensive cities in the world to acquire property.
• Will there be a gradual slide or a quick slump. Some think both with 15% reduction in 2012 followed by a further 25% over the next 5 years.
• Like the UK, France has a large proportion of family wealth tied up in property particularly compared to Japan and the USA.
• The new president has his work cut out on many fronts but needs to keep an eye of his housing market.

Spanish Eviction Growth

• Unemployment is causing default on a growing number of mortgage debts.
• Forbearance is not popular in Spanish banking circles and repossessions are on the increase.
• Banks are still full of toxic assets from the housing value collapse.
• The price of some homes has halved and negative equity is more dramatic in Spain than many other European countries.

Update on Other European Housing Markets

• The first quarter of 2012 was the weakest quarter for the Dutch housing market since the outbreak of the credit crisis in 2008. Dutch Housing Market Comment
• Irish house prices in the first quarter of 2012 continued to fall but the drop of 1.7% is the smallest quarterly drop since the market collapse began in earnest in 2008. Perhaps the early medicine that the Irish government took to correct the economy is having an impact.
• The ‘Swedish housing market has shown great resilience during the financial crisis in 2008-2009, advancing to new highs during 2011, a depreciation in prices could be triggered by central bank rate hikes if inflation increases further and hawkish regulators impose further equity requirements on home owners.’ more from Beware Swedish Housing article