Property Index Overview of European Residential Markets 9Th Edition, July 2020 Property Index | 9Th Edition, July 2020 Property Index | 9Th Edition, July 2020

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Property Index Overview of European Residential Markets 9Th Edition, July 2020 Property Index | 9Th Edition, July 2020 Property Index | 9Th Edition, July 2020 Property Index Overview of European Residential Markets 9th edition, July 2020 Property Index | 9th edition, July 2020 Property Index | 9th edition, July 2020 Introduction Introduction 3 We are pleased to present you the ninth edition of the Property Index, Overview of European Residential Highlights 5 Markets. During almost a decade, Property Index has become one of the most important and popular European Impacts of the Coronavirus Pandemic real estate publications and has acted as a valuable source for on Residential Markets in Selected Countries 6 professionals, institutions and general public. Economic Development in Europe 7 Property index analyses factors shaping the residential markets and their development and compares residential property Comparison of Residential Markets – prices across selected European countries and cities. Housing Development Intensity 10 The publication aims to provide you with European residential Comparison of Residential Property Prices market data on a regular basis and to answer questions on how in Selected Countries and Cities 15 Europeans live and at what costs. Mortgage Markets in Europe 30 Despite the fact that the publication’s focus is to provide a complex overview of the past year’s development on 32 Annex: Comments on Residential Markets residential markets in European countries, we could not ignore the current unprecedented situation caused by the coronavirus 45 Contacts pandemic. We included a brief overview of early impacts of the pandemic and related measures on residential markets in the Authors 46 participating countries and their expected future development. We hope you will find this edition of Property index interesting and that it will provide you with insights and information you need. 2 3 Property Index | 9th edition, July 2020 Property Index | 9th edition, July 2020 This year, we analyzed residential markets This edition of Property Index has the in: historically highest number of participating countries with Bosnia and Herzegovina, • Austria (AT); Highlights Bulgaria, Ireland, Israel, Luxembourg, • Belgium (BE); Serbia and Slovakia joining the publication. • Bosnia and Herzegovina (BA); Most presented indicators are on a year- • Bulgaria (BG); on-year basis and are to some extent also influenced by geopolitical situation and • Croatia (HR); 7,145 EUR/sqm various factors affecting the volume of Oslo • Czech Republic (CZ); supply and demand. Luxembourg took the position of the • Denmark (DK); most expensive country in terms of new Prices of new dwellings A proven international and cross-functional in Norwegian capital • France (FR); apartment prices in 2019 -7.4% team of Deloitte professionals in the Oslo decreased by 9.0% • Germany (DE); development, mortgage and real estate year-on-year markets prepared the Property Index. This Average transaction • Hungary (HU); publication has been prepared using data price of new dwellings in Serbia decreased • Ireland (IE); collected by individual Deloitte offices in the participating countries. by 7.4% between 2018 • Israel (IL); and 2019, which is the biggest fall among • Italy (IT); Property Index capitalizes on Deloitte’s 11.4 extensive knowledge of the real estate compared countries • Latvia (LV); and development industry, enabling us to For the fourth time in • Luxembourg (LU); provide you with independent and credible a row, homebuyers information. in the Czech Republic • Netherlands (NL); had pay the highest • Norway (NO); multiple of their annual gross salary to purchase 12,863 EUR/sqm • Poland (PL); a 70 sqm dwelling Paris remained on the position of the most expensive city to • Portugal (PT); purchase a square meter of apartment in Europe before Tel Aviv • Serbia (RS); and Luxembourg City • Slovakia (SK); • Spain (ES); and • United Kingdom (UK). 164% Housing prices in Lisbon and Porto were on average 164% higher than the national average, 550 EUR/sqm which is the highest deviation among participating countries With 550 EUR/sqm of a new dwelling, Bulgaria had the lowest prices among countries in the Property Index 30.71 EUR/sqm Luxembourg City, a new entrant into the publication, was the most expensive city in terms of monthly rent 4 5 Property Index | 9th edition, July 2020 Property Index | 9th edition, July 2020 construction works might be the shortage Transaction activity in Q2 2020 is expected Curious circumstances can be observed of labor, especially in countries, where to be significantly lower than in the previous on the real estate market in Bosnia and most of the construction workers are years on most of the selected markets. Herzegovina. Its future development Impacts of the from abroad and returned home after the A decline will be caused by uncertainty is closely intertwined with economic outbreak of the coronavirus. in terms of economic and epidemiologic development of Western Europe, as big development that might encourage share of buyers are from the numerous Rental markets in most of the participating potential buyers to postpone their decisions BiH diaspora living and working abroad. Coronavirus Pandemic countries demonstrated the fastest into safer times. Moreover, most of the A similar phenomenon, although to response to new circumstances on the banks across the participating countries a smaller extent, is to be seen also on other market. Especially in major cities, such have already applied stricter conditions, eastern European real estate markets. as Paris, Rome, Prague or Budapest, such as lower LTV ratio or higher disposable restrictive measures effectively stopped income of applicants, on new mortgage The current unexpected situation brought on Residential Real Estate the inflow of tourists and many of loan applications. On the other hand, several restrictions into the functioning of apartments located in city centers, interest rates of almost every central bank in the residential real estate market. In the originally used for P2P accommodation Europe are close to zero, which means that immediate future, numerous technological services, were introduced to the long-term mortgage interest rates will remain low for solutions could emerge and change the Markets rental market, which created a pressure on the upcoming period. This might encourage unwieldy processes on the market. In many rents to decrease. However, it is uncertain, people with stable income to invest into countries, virtual property inspections whether these dwellings will return to the residential real estate. via video calls were enabled to tackle the How did residential markets in selected countries react to short-term market once tourism activity social distancing measures. The pandemic recovers. In terms of price development, most might change the way people think about the outbreak of the virus and what is expected to happen countries expect property prices to housing. Spread of the option to work in the near future? The development of the residential real stagnate or undergo a slight correction remotely will possibly redirect part of the estate market across Europe varies in 2020 before returning to growth in demand from cities into more peripheral from country to country. In ten out of 2021 or 2022. Most positive outlooks are regions and adjust price levels across 23 participating countries, stagnation is in countries with limited available land countries to be more even. Furthermore, After several years of growth across all and developers are in a better financial although a slight delay in permitting expected on the residential market in terms bank, which are also attractive for foreign implementation of technologies such as segments of the real estate market, year condition than on the edge of the previous processes and construction may occur, of price and a decline in terms of transaction professionals, such as Luxembourg, electronic validation of contract certificates 2020 was anticipated to confirm this trend. crisis. there must not be a significant outage of activity. Experts from six countries have Belgium or the Netherlands. Contrary, via block chain may become part of the Nevertheless, since late December 2019 production in order to protect the housing negative expectations in terms of price a steep decline is expected in the sales process together with virtual reality a new type of coronavirus started to spread We asked our real estate experts from market. The role of government help, either development and overall market activity United Kingdom after the market fully tours in development projects currently in across the world from China. In February participating countries to share their in form of guarantees or direct financial in the future. These countries being ones, understands the economic impacts of construction. and March 2020, most of the European thoughts and observations about the involvement, will be crucial to tackle this which were hit hard by the virus (the United the pandemic and the still uncertain countries were hit by the pandemic and immediate impacts the coronavirus had imminence. Kingdom, Croatia) or ones with already form of Brexit. Hungary also expects This crisis gives the whole market a new were forced to impose restrictive measures on the residential markets and how will slowing markets (Hungary). Contrary, an accelerated decline on the already perspective on how people across Europe on their economies and the free movement markets develop in the upcoming months. Immediately after the implementation of a positive outlook is being articulated by cooling residential market. Other live and
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