Entry Date: 3.10.2021 20:41
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Europe, where housing prices and rents have recorded a record increase due to the new type of coronavirus (Kovid-19) epidemic While the hope of people in to become a “home owner” is gradually decreasing, the ongoing protests despite the rising prices lead the politicians to seek a solution.
TO BE A HOME OWNER IS A DREAM
While housing prices and rents have increased rapidly in almost all European countries due to Kovid-19, the epidemic, social equality and financial raises concerns about stability. From Berlin to London
of Europe In many cities, families find it “impossible” to own a house due to high prices.
Political polarization and more problems in Europe because more people are stuck in high rent
According to the data of the European Statistical Office (Eurostat), house prices in EU countries, measured by the House Price Index, have increased from 2010 to 2021.
There was a serious increase in housing prices in the first quarter of the year in the EU countries, which had economic hard times due to the epidemic and the accompanying price increase. Increase; 17 percent in Luxembourg, 15.3 percent in Denmark, 11.9 percent in Czechia, 11.3 percent in the Netherlands, 9.4 percent in Germany, France 5.5 percent and Belgium
The increase in the first quarter was recorded as the highest increase since mid-2007, while the European Central Bank (ECB) announced that Germany, France and He stated that the Netherlands accounted for almost three-quarters of the total housing price increase in the region last year.
Analysts, low housing supply, He said that the influx of immigrants, the lowest interest rates in history, the savings accumulated due to the restrictions during the epidemic period, and the increase in the desire to be in more space with working from home accelerated the upward trend in housing prices.
Russia Rich institutional and private investors in Asia and the Gulf region are also causing an increase in housing prices with “high price” offers. Some countries on the continent, such as Ireland, have also resorted to raising taxes, such as stamp duty, to prevent these investors from buying large numbers of properties.
Berlin Mayor Michael Mueller, who made evaluations about the high prices, said, “Because some parts of the society no longer have the money to buy an apartment, they are leaving some parts of our city. In London, Paris This is the case in , in Rome and now unfortunately in Berlin…”
EUROPE PROPERTY SYMPTOMS OF OVERHEATING IN THE MARKET
Meanwhile, China’s The Evergrande Group news in May is a reminder of how difficult it can be to try to “tame the market”. Concerned that rising housing costs could trigger unrest and add risks to the financial system, Chinese leaders took action to curb price increases and rein in borrowing. CEO) Reiner Braun added, “Of course we have a real estate bubble.”
WARNING FROM THE NATIONAL BANK OF AUSTRIA
10 years ago The House Price Index of the National Bank of Austria (OeNB), which was 127 points, almost doubled to 245 points.
OeNV on “increasing overheating in the real estate market” While making warnings, the average square meter price of apartments in the capital Vienna is over 5 thousand 248 euros.
HOUSING PRICE FOR SALE IN GERMANY IS ABOUT 500K EURO
Germany is in the top group in the Eurozone with a House Price Index of 174.6 points. It has doubled in 10 years. Housing prices increased by 148 percent in the capital Berlin and by 110 percent in Munich.
The average price per property in Germany, including side costs, reaches approximately 500 thousand euros.
HOUSING PRICES IN SWEDEN IN THE LAST 12 MONTHS INCREASED 14 PERCENT ON AVERAGE
Record low interest rates and the desire to own one’s own home triggered by the Kovid-19 outbreak also caused a huge increase in the prices of detached houses and apartments in Sweden.
Housing prices have increased by 14 percent on average in the last 12 months. The country’s House Price Index rose to 174.26 points.
The average price of a detached house in Stockholm is 8.5 million kronor (830 thousand euros), while for an apartment an average of 4.7 million kronor (470 thousand euros) has to be paid.
SWITZERLAND
Decrease in construction and rapidly increasing demand caused housing prices to rise rapidly in Switzerland. In the country where the Housing Price Index rose to 144.69 points, the square meter prices in some select regions are above 36 thousand Swiss francs (33 thousand 350 Euros).
PRICES IN LONDON HAVE INCREASED UP TO 80 PERCENT IN THE LAST 10 YEARS
The average house price in England has increased by 60 percent since 2010, exceeding 266 thousand pounds. In the capital, London, which is higher than the country average, prices have increased by up to 80 percent in the last 10 years. It is noteworthy that many Brits are looking for larger apartments due to the increasing need for space. it is expected to have an impact on the real estate market if it increases in any way.
PRICES INCREASED MORE THAN 56 PERCENT IN PARIS
Although real estate prices in France have increased by 22 percent on average in the last 10 years, great regional differences draw attention.
Capital Paris’ Prices rose by more than 56 percent, with increases by 40 percent in Strasbourg, 67 percent in Lyon and 73 percent in Bordeaux. Square meter prices in Paris are over 10 thousand euros.
Expropriation SOLUTION TO THE RENTAL CRISIS IN BERLIN
Average rents in Berlin, the capital of Germany, have increased by 86 percent since 2010. In Berlin, where housing prices increased by 11 percent in 2020, rents increased by 43 percent in the last 5 years. It continues to be a big problem for the city it owns.
Rising housing prices and rising rents also cause reactions to big real estate companies in many European countries.
The decision of the Berlin state government to freeze rents for 5 years from 2020 (Mietendeckel Law) in 2019, following the reactions from the citizens against the rent increases, was later declared unconstitutional by the Constitutional Court. was found and cancelled. Protests against rent increases have continued in the city since the decision.
In the non-binding referendum held on September 26 to bring a public-oriented solution to the housing problem, approximately 56.4 percent of the voters voted to expropriate more than 240 thousand apartments from real estate companies. while 39% voted “yes” and 39% voted “no.”
In the 2004 privatization period in Berlin, approximately 100 thousand houses were sold to real estate companies such as Vonovia and Deutsche Wohnen for 1,100 euros per square meter. Today, the square meter price of these residences is over 3 thousand euros.
Companies are the owners of 550 thousand residences, most of which are in Germany with a value exceeding 80 billion euros.
In Germany, about 50 percent of the population rents a house. With the increase in house prices and rents, more disposable income goes to rents.
“GERMAN PEOPLE WITH NO MUCH CHANGES IN INCOME ARE VERY NEGATIVELY AFFECTED BY THIS SITUATION”
The founder of Emlak24.com, which provides real estate investment consultancy services, Doğan Gündoğdu told Anadolu Agency (AA) that the annual real estate sales prices and rents in Germany have increased by an annual percentage of the last 10 years. Gündoğdu said, “There is a lack of supply for housing in Germany. The arrival of immigrants and the population flow to the main cities increased the demand for housing. New “The construction does not take place due to bureaucracy and the fact that the lands are not opened for construction. Thus, the rising demand is not met.”
Expressing that due to the high uncertainty and volatility in the stock markets due to Kovid-19, Gündoğdu stated that investors are turning to real estate investments, which are relatively safe, and also added that they are interested in the Gulf and Eastern Europe. Gündoğdu said that the presence of corporate and individual wealthy investors in the market also pushed up the prices. Housing prices increase by more than 10 percent while increasing by 1 or 2.” said.
“WE DO NOT EXPECT A LOT OF CHANGE IN PRICES”
Doğan Gündoğdu stated that due to the aforementioned developments, pressure started to occur on politicians and said:
” Political parties also promise to provide incentives to the construction industry to solve the problem, to build social housing or to make arrangements to prevent prices from inflating. But the debates between parties about intervention in the market are endless. While the Social Democrats and Greens support increasing social housing projects and setting a cap on prices, the right and the right liberal parties advocate encouraging construction and making it more attractive.”
Stating that the support to the construction sector will gain momentum with the increase of public pressure, Gündoğdu said that the bureaucracy will be made more pragmatic in this regard, and on the other hand, social He said that the number of studies will increase.
Gündoğdu said, “We do not expect a big change in prices. There may only be a loss of momentum in the price increase. The increase, which was over 10 percent before, may decrease to 7-8 percent. (Citizens) They can still turn very low interest rates into an advantage.”
THE INCREASE IN RENTALS BELOW THE INCREASE IN HOUSING PRICES
Stefan Scharff, managing partner of SRC Research, which analyzes real estate companies listed on the stock exchange in Germany, Austria and Switzerland, said that housing demand in Germany is much more than supply. .
Stating that the activities in new housing constructions are increasing very slowly, Scharff noted that it takes a long time to provide housing space and permits for construction. Scharff stated that although the rents were high, this remained below the increase in housing sales prices. He said that the demand of these investors also put pressure on the housing prices in the country. Stating that he is looking for “investment”, Scharff said, “After the increase in inflation rates, people invest in the raw material market, energy, real estate, and even old cars in order not to lose their capital.”
Scharff added that in order to increase the housing supply in Germany, the government should provide housing space and reduce bureaucracy in the construction permit process.
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