Europe’s Housing Market Is Simmering, Not Bubbling
ByECB data show pace of property-price growth exceeds long-term average
House prices in the euro area seem to only know one way: Up.
The inflation-adjusted annual expansion in property values has move above longer-term averages, the European Central Bank said in its Economic Bulletin. But with the recovery in real estate prices at a “fairly early stage,” there are currently no signs of a bubble, it argued.
“Valuation measures applied to euro-area aggregate data suggest that prices are currently broadly in line with fundamentals and show no signs of the excess seen in 2007,” the Frankfurt-based institution said. “However, this aggregate perspective does not rule out excessive valuations and corresponding vulnerabilities at the country or regional level, especially when house price dynamics are combined with strong mortgage growth and high leverage.”…
