House market up in new ten

By Anna McLauchlin

Date: 23/09/04

THE private housing market in the new EU member states is set to explode in the coming years, according to a new report from the European Mortgage Federation.

According to the report, which will be released next week, mortgage loans in Hungary rose by 149.8% in 2002-03, in Latvia by 86.1%, in the Czech Republic by 42.9% and in Poland by 22.4%.

Though the high figures are partly indicative of how small the markets are, EU membership has ignited the political will to create a market economy in eastern Europe and home ownership is booming.

"Mortgage loans [in new member states] are one of the fastest growing areas in financial markets, having taken off from negligible levels," the report states.

"Confidence in these economies resulting from joining the EU is expected to have a significant effect going forward."

The report showed that house prices rose strongly across most of the EU, fuelled by falling interest rates.

The strongest house-price increases were registered in the UK, Portugal, Spain and Ireland - all showed increases of 14% or more during the last year. France is also experiencing rapid growth.

A report published by the European Mortgage Federation predicts a price explosion of private housing markets in new EU Member States in Central and Eastern Europe, especially in smaller countries.

European Mortgage Federation: Homepage http://www.hypo.org/Content/Default.asp

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