High interest rates will have a long-term impact on European home prices – opinion of Standard & Poor’s

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In most European countries, housing costs will fall by about 8% by the end of 2024.

What's happened? One of the world's largest rating agencies, Standard & Poor's, has presented the results of its latest study of the European housing market 'European Housing Markets: Sustained Correction Ahead'.

The main verdict of experts was the forecast that rising interest rates in Europe will lead to a sustainable correction in nominal housing prices in most countries of the continent.

The reasons. Rising mortgage rates are the main reason for weakening demand and falling prices. Despite this, the need for housing in Europe remains high.

Forecasts. In housing markets where borrowing costs will remain high in real terms, a strong rebound in house prices after a correction is unlikely  even after renewed central bank rate easing.

According to the rating agency, there will be no collapse in housing prices either. However, the decline in property values will be significant, reaching around 12% in Germany and the UK, and averaging more than 8% in most countries by the end of 2024.

Please read also: UBS has revealed the cities with the housing bubble risk

Source: Idealista

Photo by JOSHUA COLEMAN on Unsplash 

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