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House prices showing the highest increase since the crisis

How to interpret the latest Eurostat data

Brussels, 26 April 2017 | Published in Economy

On 7 April 2017, Eurostat released new data on house prices updated to the fourth quarter of 2016. Data show that house prices, as measured by the House Price Index, rose by 4.1% in the euro area and by 4.7% in the EU in the fourth quarter of 2016 compared with the same quarter of the previous year. Analysis by the Housing Europe Observatory.

Although still way below the growth registered in 2006, this is the highest annual growth rate since 2009, showing house prices have overall recovered since the crisis. Nevertheless, data show different trends across EU countries. Among the Member States for which data are available, the highest annual increases in house prices in the fourth quarter of 2016 were recorded in the Czech Republic (+11.0%), Hungary (+9.7%) and Lithuania (+9.5%), while prices remained nearly stable in Italy (+0.1%).

Looking at the deflated ( or 'real') house prices index (which is part of the scoreboard indicators used in the Macroeconomic Imbalances Procedure (MIP) of the European Commission), in 2016 eleven countries registered an annual growth rate equal to or above the 6% ‘alarm’ threshold adopted in the context of the MIP. They included Bulgaria, Czech Republic, Hungary, Latvia, Malta, Austria, Portugal, Romania, Slovakia,  Sweden and the UK.