The average level of house prices in the European Union (EU) has been stable for three years, although there are great differences in price developments between the countries. In the Netherlands and Spain house prices have been falling since the financial crisis of 2008. In the United Kingdom house prices have recovered since then, while in Germany they were barely affected by the crisis.
Dutch house prices continue to fall
According to Eurostat’s House Price Index (HPI), which compares house prices internationally, Dutch house prices fell by more than the EU average. Until the start of the financial crisis in 2008, Dutch house prices had risen continuously. Shortly afterwards, both the average price level in the EU and house prices in the Netherlands fell sharply. After the peak in 2008, Dutch house prices continued to fall by an average 4 percent a year, while the EU average stabilised.
House Price Index: the Netherlands and the EU
Different price developments in the EU
House prices in other EU countries also peaked just before the financial crisis. After 2008, different price developments can be observed. In Spain house prices continued to fall by an average 7 percent a year. In the United Kingdom house prices fell and then recovered. Germany is the exception within the EU, as the financial crisis hardly seems to have affected prices on the German housing market. Prior to the crisis price developments in Germany already differed from those in the Netherlands and the rest of the EU.
House Price Index: the Netherlands, Germany, United Kingdom and Spain
On 31 January 2013, Eurostat launched its House Price Index (HPI) as the official European indicator for house price developments. Until then Eurostat had only published experimental house price indicators. EU member states are now required to supply their national House Price Index (HPI) on a quarterly basis.
The HPI describes price developments on the housing market. This includes all apartments, one-family houses and other existing and newly constructed dwellings bought by households. As the index only takes into account market prices including land, new self-built homes are excluded.
Eurostat has prepared a manual describing which methods may be used in the HPI so that international comparison of house prices is possible. As a number of countries do not yet fully meet the prescribed methods, the international comparison is somewhat limited.
The HPI differs from the Dutch price index for existing (i.e. excluding new construction) homes (the PBK). The Dutch HPI consists of a weighted sum of the PBK and the price index fo newly constructed homes (the PNK). The PNK accounts for one fifth of the HPI. The PNK is not yet published as a separate index, but will be once the compilation method has been improved. Statistics Netherlands is currently looking at ways to do this. Statistics Netherlands will continue to use the price index for existing homes (PBK) in its regular publications.