The latest published studies have revealed a steady rise in real estate prices throughout France, with major cities such as Paris or Lyon being the most affected by this phenomenon. But France is not the only country in Europe to suffer the surge in property prices. Indeed, this increase concerns the whole of Europe.
A surge in prices in most European capitals
Real estate prices continue to rise in Ile-de-France and especially in Paris where the increase is estimated at + 5%, driven by a boom in the old real estate and luxury real estate. But this situation is not unique to the city of Paris since other capitals of Europe have undergone the same increase in their real estate prices. These increases are sometimes even greater than those recorded in recent months in the Paris region.
Thus, in 2017, Berlin saw its property prices increase by 6.5% and Amsterdam by 20.9%, the record of all the capitals of Europe. Brussels and London are rather in the low average with respectively 4.3% and 2.3% price increase. By observing the prices per square meter, there are great disparities between the cities: € 8250 for London against € 3239 for Berlin or € 3645 for Amsterdam. Capitals in which property prices were already very high have therefore risen moderately, while capitals where prices remain affordable have undergone the largest increases. This phenomenon tends to reduce the price differences between European capitals, even if the difference remains very marked between the most expensive capitals and the cheapest capitals.
Prices expected to increase further in 2018
This upward trend in prices is not expected to slow down in 2018. Most European capitals expect a further increase, like Paris or Brussels. Only Luxembourg, Austria, the Netherlands and Switzerland provide for price stabilization.
In parallel with this widespread price increase, Europeans are also witnessing a fall in mortgage rates. Far from being unique to France, this steady decline in rates is happening across Europe and allows some households to finance their real estate investments at lower cost. Unfortunately, for the vast majority of borrowers, falling rates are not enough to offset the rise in real estate prices, and access to credit remains complicated for the poorest households.