Rapid euro zone house market recovery raises affordability concerns, ECB says
The euro zone housing market has already recovered from its recent slump and prices are likely to rise further, challenging affordability in a potentially unhealthy development, the European Central Bank said in an Economic Bulletin article. House prices slumped from 2022 as surging inflation, high energy costs and rising interest rates all constrained a market that had been on an exceptional run in the preceding several years. But this downturn was shallow, with the peak-to-trough part of the cycle showing a cumulative decline of 3% over one and a half years, a smaller drop than during the global financial crisis and the sovereign debt crisis, when prices fell almost 5%, the ECB said on Monday.