Filenews 13 January 2025
Despite the high prices recorded in rental prices in our country and expressed discomfort by citizens, the increase recorded comparatively from 2010 to the third quarter of 2024 is one of the lowest in the EU-27 and the Eurozone. At least, this is what Eurostat's comparative country data shows. House prices and rents in the EU followed similar behaviour between 2010 and the second quarter of 2011, but have since evolved differently. While rents have been rising steadily, house prices have followed a more volatile pattern, combining periods of decline followed by rapid increases. Between 2010 and the third quarter of 2024, house prices in the EU increased by 54.1% and rents by 26%.
In terms of national data, when comparing the third quarter of 2024 with 2010, house prices increased more than rents in 20 of the EU countries for which data are available. Over the same period, house prices more than tripled in Hungary and Estonia (both +230%) and more than doubled in Lithuania (+181%), Latvia (+154%), Czechia (+135%), Austria (+114%), Portugal (+113%), Bulgaria (+110%) and Luxembourg (+103%). In Cyprus the increase was 0.6%, the lowest in Europe, followed by Italy, the only country where house prices fell during this period (-4.4%). In Cyprus, year-on-year growth in the third quarter of 2024 was 2.7%.
Among the countries for which data are available, 4 experienced an annual decrease in house prices in the third quarter of 2024 and 22 countries experienced an annual increase. The largest decreases were recorded in France (-3.5%), Finland (-2.8%) and Luxembourg (-1.7%), while the largest increases were recorded in Bulgaria (+16.5%), Poland (+14.4%), Hungary (+13.4%), Croatia (+12.3%) and the Netherlands (+10.3%).
Of course, it is not only house prices but also the course of rents. According to Eurostat, rents increased in 26 EU countries, with the highest increases recorded in Estonia (+216%), Lithuania (+183%), Ireland (+109%) and Hungary (+108%). In Cyprus the increase in rents is 10% and the country is in last place, penultimate is Italy with an increase of 14.2%, while Greece was the only country where rent prices decreased (-16.1%).
Eurostat explains that the house price index has been used in combination with other macroeconomic statistics to create derivative indicators to analyse housing market dynamics. Between 2010 and 2014, the downward trend (or negative annual growth rates) reflects the fact that house prices in the euro area either declined or rose less than inflation.
In 2015, house prices began to rise more than inflation and, between 2016 and 2021, house prices rose by 2.9% to 5.5% more than inflation. In 2022, house prices rose just above inflation (+0.3%) and in 2023, they declined in a context of high inflation, leading to a significant decrease of 7.1% in the annual deflated house price. Between 2016 and 2021, house prices rose each year more than inflation in at least 24 of the 27 EU countries. In 2022, house prices rose more than inflation in 16 EU countries. In 2023, house prices increased less than inflation in 22 EU countries and increased more than inflation in 5 EU countries (Bulgaria, Greece, Croatia, Lithuania and Portugal).
Reasons affecting the indicator
The characteristics of the dwelling that most affect the price are the type of dwelling (flat, single-storey, single-storey house, etc.), its size and location. A second issue is the heterogeneity of the housing market, where virtually every home bought and sold is different from the others in some respect. Also, according to Eurostat, prices cover the cost of acquiring a property on its own and not the total cost necessary to acquire, own and maintain a residential property. Therefore, other costs related to the acquisition of the property and major repairs are excluded from its scope. As Eurostat explains, the CPI should be considered as an independent price index aimed at measuring house price developments for market traders.
