Cyprus recorded the largest quarterly drop in house prices during the third quarter in the EU, but prices are still increasing in the annual base.
More specifically, house prices, as measured by the House Price Index, rose by 4.1% in both the euro area and the EU and by 2.3% in Cyprus, in the third quarter of 2019 compared with the same quarter of the previous year, according to Eurostat, the statistical office of the European Union.
Compared with the second quarter of 2019, house prices rose by 1.4% in the euro area, by 1.5% in the EU and dropped by -5.9% in Cyprus in the third quarter of 2019.
Among the Member States for which data are available, annual increases in house prices were observed in all countries in the third quarter of 2019. The highest increases were recorded in Latvia (+13.5%), Slovakia (+11.5%), Luxembourg (+11.3%) and Portugal (+10.3%). Compared with the previous quarter, the highest increases were recorded in Latvia (+3.9%) and Slovenia (+3.1%), while decreases were observed in Cyprus (-5.9%), Hungary (-1.5%), Denmark (-0.6%), Italy (-0.3%) and Finland (-0.1%).
House prices and rents in the EU have followed very different paths since the financial crisis. While rents increased steadily throughout the period up to the third quarter of 2019, house prices have fluctuated significantly.
After an initial sharp decline following the financial crisis, house prices remained more or less stable between 2009 and 2014. Then there was a rapid rise in early 2015, since when house prices have increased at a much faster pace than rents.
Over the period 2007 until the third quarter of 2019 rents increased by 21.0% and house prices by 19.1%.
Between 2007 and the third quarter of 2019, there were increases in house prices in 22 EU Member States and decreases in 6, with the highest rises in Austria (+85.5%), Luxembourg (+80.6%) and Sweden (+80.3%). The largest decreases were observed in Greece (-40.0%), Romania (-27.2%) and Ireland (-16.7%).
For rents, the pattern was different with increases in all Member States, except Greece (-17.5% annual estimate for 2018) and Cyprus (-0.3%). The largest increases were observed in Lithuania (+101.1%), Czechia (+78.6%) and Hungary (+67.8%).