House prices in the EU show the biggest annual increase since 2007

House prices in the European Union rose 6.1% in the first quarter of this year compared to the same period in 2020, their biggest increase since 2007, the bloc’s statistics office said on Thursday.

The house price index for euro area countries rose 5.8% in the first three months compared to the previous year, its biggest increase since the fourth quarter of 2006, Eurostat said in a report. communicated.

Compared to the fourth quarter of 2020, house prices increased by 1.3% in the euro area and by 1.7% in the EU in the first quarter of 2021.

Among the EU Member States for which data were available, the largest annual increases in house prices in the first quarter of 2021 were recorded in Luxembourg (+ 17.0%), Denmark (+ 15.3%) , Lithuania (+ 12.0%), the Czech Republic (+ 11.9%) and the Netherlands (+ 11.3%), while prices fell only in Cyprus (-5, 8%).

The issue of house prices has also become a lightning rod for critics of the ECB’s ultra-accommodating monetary policy. Its president Christine Lagarde was questioned on this subject in the European Parliament at the end of June.

“Young people and middle-class families are forced to participate in a mad race, paying too much in an overheated housing market,” said Michiel Hoogeveen, a Dutch Eurosceptic MEP. “This is one of the consequences of your generous monetary creation and your low interest rate policies to keep the weaker countries in the euro zone afloat.”

In response, Lagarde said there was “no strong sign of [a] eurozone-wide credit-fueled housing bubble, ”but added that there were“ residential property vulnerabilities ”in some countries and cities in particular.

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