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FX.co ★ European Housing Market Recovery Relies on Governmental Ability, Duration of Recession - RICS

European Housing Market Recovery Relies on Governmental Ability, Duration of Recession - RICS

(RTTNews) - The recovery of the European housing market depends on the ability of governments to deal with the mortgage credit shortage and on the scale and duration of the economic recession, results of the European Housing Review 2009 released by the Royal Institution of Chartered Surveyors showed Thursday.

RICS said house prices fell across all European markets by the end of 2008 and prospects for 2009 remains even gloomier as significant reductions in mortgage lending, due to the credit crunch, coupled with the global economic downturn, have depressed demand for residential property in Europe.

The housing review revealed that even those countries, which did not experience a boom in house prices, were not immune to the squeeze in the property market.

The report's author, Michael Ball said, "Some countries, like Ireland and the UK, led the decline but by the last quarter of 2008 the effects had spread across Europe. Given the broader context in which these housing market downturns are taking place, there is greater synchronisation of housing market decline in Europe than has been seen in the past and there are going to be some tough times before marked recovery occurs."

Chief Economist of RICS, Simon Rubinsohn, said, "The tightening in lending criteria by banks over the past year is now having a meaningful impact on a number of European housing markets. In addition, sentiment is clearly being affected by the worsening economic climate. As a result, activity levels will continue to weaken through much of 2009 and prices look set to fall further in most markets."

"Ensuring a ready flow of mortgage finance needs to be an important priority for European governments but the key to providing support for property markets across the region is effective measures to underpin the economy," Rubinsohn said.

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