Market Analysis
Housing Sector Overview
In 2005, the house building market in the 19 Euroconstruct countries represented:
- 5.6% of total GDP
- 48% of total European construction
In these same countries there are:
- 451 million people
- 189 million house holds
- 2.35 million completions
The average household size was therefore 2.4 people.
However, there is a marked difference between the markets in West and East.
In most Western European countries housing represents 50% of total construction, with Germany and Ireland ahead of the pack at 66%.
In contrast, in the Eastern European countries (Poland, the Czech Republic, Hungary, Slovakia), housing makes up an average of just 25% of total construction activity.
Annette Hughes, from Irish economic consultants DKM, said the performance of the big five economies - Germany, France, Italy, Spain, UK - has been 'fairly anaemic'.
But this is being offset by strong growth in Finland, Sweden, the Czech Republic and Slovakia.
The reasons for the upgrade were:
- Low interest rates and competitive mortgage rates
- More liberal financial markets with a wider choice of financing options
- More building for investment
Another factor was the confidence in the market caused by falling unemployment rates. However, Hughes felt that growth would slow to 1.0% and 0.9% in 2007 and 2008, respectively, as higher interest rates cause inflation fears to grow.
Eastern Europe Housing Market Annual Change in Real Terms
Western Europe Housing Market Annual Change in Real Terms
