Price growth in European property markets slowed in the second quarter. Is Greece next?

House prices in most European markets continue to rise, but at a slower pace than last year, indicating that real estate could be heading for tough times due to rising interest rates. interest and soaring energy costs, according to industry data.

In the second quarter of the year, house prices rose in 20 of the 28 European property markets for which figures were available in the second quarter of 2022, according to figures compiled by World Property Guide and adjusted by

“Yet only 7 countries saw stronger momentum in the second quarter of 2022 compared to the previous year.” adds Global Property Guide.

Greece is one of these countries. Latest figures from the Bank of Greece, the country’s central bank, show house prices jumped 9.4% last year, compared to gains of 6.9% in the same quarter of 2021.

Although this looks like an acceleration in price growth over the 12 month period, this is not the case when the data is adjusted for inflation (or deflation, as was the case last year).

Taking into account underlying inflation – which excludes energy and food prices – real price increases in the Greek residential real estate market in the second quarter of 2022 reach 6.7% compared to 8.1% in second quarter of 2021.

The real estate boom is slowing in Europe

Major European markets such as Germany and the UK are losing momentum while real property prices in Spain and Italy are falling.

In Spain, house prices fell 6.3% in the second quarter of the year (adjusted for headline inflation), from gains of just over 7% a year earlier, the data showed.

Despite the weak performance of the real estate market, economic growth in Spain remains robust and is expected to grow by 4% this year.

Meanwhile, in Turkey, inflation is also taking its toll on prices.

“Turkey remains the strongest housing market in our global house price survey, supported by strong demand from local and foreign investors,” said Global Property Guide.

“The National House Price Index rose dramatically by 45.88% in the year to the second quarter of 2022, much more than the 9.97% year-on-year increase previous and its best performance in recent history. In fact, in nominal terms, prices have skyrocketed by more than 160%,” he added.

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