A lot is happening on property markets across the world. House prices in the United States have been decreasing for a longer period. Problems on the American housing market prompted a global financial crisis. The consequences of this crisis have not gone unnoticed on the European property markets. In most countries price increases have slowed down or stopped, in a few countries prices have decreased. Home buyers in Germany, the US, France, Ireland, the United Kingdom and Norway paid less on average for a house in the third quarter of 2008 than in the same period last year.
Year-on-year price increases for homes in the Netherlands have been slowing down steadily since the beginning of 2008. Following substantial price increases in 1999 and 2000, the annual increase has been around 4 percent for the last five years. In other countries price rises have been very large, in some more than 8 percent; considerably higher than in the Netherlands. Developments in Dutch house prices have been relatively moderate by comparison.
Prices still rising in the Netherlands and Sweden
Of all the countries in the study, only in Sweden and the Netherlands were house prices higher in the third quarter of 2008 than in the second quarter. The largest decrease in house prices was in Norway, nearly 4.5 percent, followed by the UK with just over 2.5 percent. In other countries price falls were restricted to 1 to 2 percent.
Rising and falling house prices, 2008-III
House prices rise by more than inflation
At the end of 2008 homes in the Netherlands cost nearly 60 percent more than in 2000. In France, the UK and Sweden prices have more than doubled. Although house prices in the US have been falling for some time now, on average they are still 50 percent higher than in 2000. In Ireland, where prices have been falling for a longer period and at a higher rate, the average price is still more than 80 percent higher than in 2000.
The difference between developments in house prices and in inflation varies quite a lot from country to country. In the Netherlands the increase in house prices is around two and a half times the rate of inflation; in France on the other hand, it is six times the rate of inflation.
House prices and inflation, 2008-III compared with 2000-I
Australia, Statistics Australia
Finland, Statistics Finland
France, Statistics France
Ireland, The Economic and Social Research Institute
Norway, Statistics Norway
Spain, Ministry of Housing
United Kingdom, Communities and Local Government
United States, OFHEO, U.S. Bureau of Labor Statistics
Sweden, Statistics Sweden