Residential property prices in the euro zone are recovering from the previous property crash but some areas still have more ground to cover. Home prices in the euro zone increased by 0.6 percent during the third quarter of 2013 compared to the previous quarter, marking the second consecutive quarterly increase, according to data released today by the EU’s statistics office Eurostat. Property prices in Ireland and Spain – two markets hard hit by the bubble burst – increased during the third quarter by 4.1 percent and 0.8 percent, respectively. Ireland home prices remain 45 percent below their peak, but the market has shown signs of revival. The country has now exited its EU/IMF bailout program and recorded the first increase in home prices last October. “Growth is creeping back to Ireland’s property market after six very difficult years,” Phil Tily, executive director & head of UK and Ireland, IPD, said in a report. “The rewards of lowering stamp duty, the ridding of rent review legislation, maintaining corporation tax levels, and successfully implementing austerity measures are now starting to pay off, and hopefully what is emerging is a fitter, leaner and more sustainable property sector.” Ireland introduced the country’s first REIT last summer, with the first purchase seen last fall.
Even though the downward spiral in property prices is generally over, the report underscores the zone’s struggle to return to peak levels. Home prices fell 1.3 percent in the euro area year-over-year during the third quarter, according to Eurostat. As a whole, home prices in the euro zone are approximately five percent lower than their peak in the second quarter of 2008.
More from the Eurostat report:
Among the EU Member States for which data are available, the highest annual increases in house prices in the third quarter of 2013 were recorded in Estonia (+11.1%), Luxembourg (+6.5%, flats only) and Latvia (+6.2%), and the largest falls in Croatia (-16.9%), Cyprus (-8.0%) and Spain (-6.4%). The highest quarterly increases in the third quarter of 2013 were recorded in Estonia (+5.3%), Ireland (+4.1%), and the United Kingdom (+2.5%), and the largest falls in Slovenia (-4.0%), Denmark (-3.3%) and Romania (-2.4%).