House prices have fallen by 1.7% in the euro area compared to the previous year and by 1.1% in the European Union in the second quarter of 2023, according to Eurostat.
The trend in the European property market is about to change: Houses are cheaper on average than last year, but there's a definite shift in the quarterly numbers, hinting that the decrease might not last long.
European house prices fell for the first time year-on-year since 2014 in the second quarter of 2023, according to the latest numbers from Eurostat, the statistical office of the European Union.
The House Price Index fell by 1.7% in the euro area and by 1.1% in the EU between April and June, compared with the same quarter of the previous year. These numbers follow an annual increase of 0.4% and 0.8% in the euro area and EU respectively, detected in the first three months of the year.
In a quarterly comparison however, prices started to increase: By 0.1% in the euro area and by 0.3% in the EU between April and June 2023.
Since the last three months of 2022, house prices fell for two quarters in a row: -1.4% in the fourth quarter of 2022 and -0.7% in the first three months of this year, before experiencing a small rise in the second quarter of 2023.
Which countries have seen the biggest price drop?
Nine EU countries recorded lower prices in the second quarter of 2023 than in the previous year, but in the other 17 member states, house prices keep mounting.
Germany recorded the sharpest annual decrease over the quarter, at -9.9%, followed by Denmark at -7.6% and Sweden at -6.8%.
Croatia registered the largest increase at +13.7%, followed by Bulgaria at +10.7% and Lithuania at +9.4%.
Rents keep increasing steadily
In the second quarter of 2023, rents in the EU increased by 0.7% compared to the previous three months. Rents were 3% more expensive on average compared to the same period of the previous year.
The numbers show a steadily increasing rate quarter by quarter.
In the last three months of 2022 rents rose by 2.5% annually, and in the first three months of 2023, they surged by 2.9%.
A look back
Between 2010 and the second quarter of 2023, house prices increased by 46% and rents by 21% in the EU, states Eurostat.
When comparing the second quarter of 2023 with 2010, house prices increased more than rents in 20 out of the 27 EU countries.
House prices more than doubled in Estonia, Hungary, Lithuania, Latvia, Czechia, Luxembourg and Austria but a slight decrease was detected in Greece, Italy and Cyprus.
For rents, prices increased in 26 EU countries with the highest rises in Estonia (+208%) and Lithuania (+168%). The only decrease in rent prices was recorded in Greece (-21%).