Malta and Cyprus have had significant price rises again, reflecting their attractiveness to English speaking sun-seekers, said RICS (Royal Institution of Chartered Surveyors) in its European Housing Review 2007.
RICS is the largest organisation for professionals in property, land, construction and related environmental issues worldwide. Its latest review, created with the support of Savills, looks at the performance of 18 European housing markets in the preceding calendar year, analysing trends across the continent in areas such as inflation, building activity, mortgage markets and turnover.
1) Europe’s housing markets did not cool in 2006 after interest rate rises and the majority were still experiencing double-digit house price inflation;
2) Transactions and mortgage borrowing were strongly up through most of Europe;
3) The European Central Bank’s (ECB) interest rate hikes have not been fully passed on in higher mortgage rates and seem to be having limited impact on housing markets;
4) The rate of house inflation declined somewhat in France and Spain but rose in Ireland and the UK;
5) Prices in Germany remain static though the house price slump seems to be over as the economy picks up;
6) Small countries are having the biggest house price rises, including Greece and Ireland and countries in Scandinavia;
7) The smaller traded markets of central and eastern Europe, the Baltic States, Poland, Bulgaria and Romania are still experiencing major house price growth.
Several countries have experienced slow price growth in recent years, notably the Czech Republic, though price rises are generally stronger in up-market sectors. Hungary remains tranquil in real terms, partly reflecting economic and political difficulties, the RICS added. Croatia recorded no price change at all (at least in the first half of the year) although there are hot spots in the holiday areas.
Poland seems to be a new hot-spot, with Warsaw prices rising by a third in 2006 and in Krakow by even more.