Euro zone house prices set for reality check as pandemic bites: ECB

FRANKFURT (Reuters) – House prices in the euro zone are in for a reality check as a pandemic-induced recession pushes more people out of work and hits household confidence, the European Central Bank said on Wednesday.

FILE PHOTO: A euro logo sculpture stands in Frankfurt October 26, 2014. REUTERS/Ralph Orlowski

Residential property prices were remarkably resilient during the first wave of the coronavirus pandemic, rising by 5% in the first half of 2020, thanks to loan repayment moratoria and job- protection schemes put in place by governments.

But, with some of these measures expiring and economic indicators pointing downwards, the ECB said the outlook is now less rosy.

“Residential real estate price growth might face headwinds going forward as a result of a marked decline in GDP, consumer confidence and employment expectations,” the ECB said in its Financial Stability Report.

At a country level, valuations appeared most stretched in Luxembourg.

Read More

Euro Zone House Prices Set for Reality Check as Pandemic Bites: ECB | Investing News

FRANKFURT (Reuters) – House prices in the euro zone are in for a reality check as a pandemic-induced recession pushes more people out of work and hits household confidence, the European Central Bank said on Wednesday.

Residential property prices were remarkably resilient during the first wave of the coronavirus pandemic, rising by 5% in the first half of 2020, thanks to loan repayment moratoria and job- protection schemes put in place by governments.

But, with some of these measures expiring and economic indicators pointing downwards, the ECB said the outlook is now less rosy.

“Residential real estate price growth might face headwinds going forward as a result of a marked decline in GDP, consumer confidence and employment expectations,” the ECB said in its Financial Stability Report.

At a country level, valuations appeared most stretched in Luxembourg. The most indebted households were to be found in the Netherlands.

(Graphic: Euro zone

Read More

ECB Told Home Prices, Fiscal Spending Key as Strategy Reviewed

(Bloomberg) — The European Central Bank should target higher average inflation — unless house prices are soaring — and governments must spend their way out of recession, according to economists attending the institution’s annual forum.

Loading...

Load Error

ECB President Christine Lagarde will open this year’s event on Wednesday, with Federal Reserve Governor Jerome Powell and Bank of England Governor Andrew Bailey joining her over two days. Normally held at a luxury hillside resort in Sintra, Portugal, this time it’s online because of the pandemic.

The discussions come as central bankers boost monetary stimulus to unprecedented levels to help counter the latest hit from lockdowns. The BOE acted last week and the ECB is expected to do so again before the end of the year.

Officials are also grappling with longer-term economic challenges though, such as globalization, climate change and digitalization. The forum, which will feed into the ECB’s strategy review,

Read More