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S&P: House Prices To Rise By 2.5% In 2015 & 2016

3 August 2015 – La Razón

The ratings agency Standard & Poor’s (S&P) expects house prices in Spain to increase by 2.5% this year and next, and to rise by 4% in 2017, driven by the economic recovery, which is gaining strength, and low interest rates.

If these forecasts are correct, house prices will rise again after years of decreases following the burst of the housing bubble.

According to data from S&P, the downwards trend was finally broken in 2014, when prices remained stable.

The improving economic conditions and low interest rates will also push prices up in other European countries.

In fact, within the Eurozone, real estate prices are set to record the greatest increase in Ireland this year, which will see growth of 9%, followed by Germany (5%), Portugal (4%) and the Netherlands (3%).

The markets in Ireland and the Netherlands, which were amongst the worst affected by the crisis, will continue to improve in 2016, with average price rises of 5% and 3.5%, respectively.

Just like in Spain, prices are also expected to stop falling in Italy this year, although unlike in Spain, they are not expected to increase, rather they will remain stable.

Only the French and Belgian markets are expected to register decreases this year, of 3% and 2%, respectively. In the case of Belgium, the downwards trend is forecast to continue into 2016.

Beyond the Eurozone, S&P expects that prices will continue to grow from strength to strength in the United Kingdom, specifically by 7%, although at a lower rate than in 2014 (10%).

The Bank of England may increase interest rates this year and whereby curb the increases over the next few years, to 5% in 2016 and 2.5% in 2017.

In the case of Switzerland, house prices will experience a slight recovery, with an increase of 1.5% this year, after rising by just 0.1% in 2014.

Original story: La Razón

Translation: Carmel Drake