No cooling for European housing markets

House prices in most European countries did not cool last year with many countries experiencing over ten per cent growth, a new survey shows.

The Royal Institution of Chartered Surveyors (Rics) reveals interest rate rises by the European Central Bank had a limited impact on Europe's housing markets, with mortgage borrowing up across most countries.

Central and eastern European housing markets experienced major house price growth in 2006, the research shows, led by Poland's huge rise of over 30 per cent last year.

Bulgaria also experienced big rises of around 20 per cent, followed by Estonia, Lithuania and Romania, where house prices increased over 15 per cent. Malta also experienced strong growth last year, with house prices rising around 11 per cent.

However, price rises have slowed across much of eastern and central Europe compared with 2005 - with Poland, Lithuania and Hungary the exceptions.

Outside of central and eastern Europe, the pace of house price rises slowed in France and Spain across 2006, with prices in Germany still static. However, prices may start to rise again as the economy is picking up.

The biggest rises were in Greece, Ireland and Scandinavian countries including Denmark and Norway (which both went up over 15 per cent).

In contrast, the only country where house prices slumped was Portugal dropping around one per cent over 2006.

"In western, northern and southern Europe, a handful of countries experienced some moderation in price growth. Price growth in Spain was five per cent less than last year (but still in double-digit figures), France lower by three per cent and Finland by two per cent," Rics reported.

The full report is available from www.rics.org or by clicking here (PDF format).