Real house prices since 2001 higher in UK than average euro zone


LONDON | Real house prices in the euro area have risen by an average of 23% since 2001, less than half UK’s growth of 50%. Five of the European Monetary Union country members saw a better house performance than the euro zone average: France saw the largest increase (82%), followed by Belgium (69%), Finland (61%), Spain (46%) and Italy (31%). In contrast, there were real price declines in Ireland (-23%), Germany (-17%) and Portugal (-11%) over the past decade.


The rise in real UK house prices over the past decade was the thirteenth highest increase among the thirty-two countries, according to the Lloyds TSB International Global Housing Market Review. In the rest of Europe, outside the euro area, there were large gains in Norway (72%), Iceland (37%), Switzerland (30%) and Denmark (25%).

But emerging markets top global house price league over the past decade. Developing economies accounted for four of the six top performing housing markets during the past ten years, including the three countries with the biggest rises. Overall, Indian house prices have risen by the most since 2001, having increased by 284% in real terms (i.e. after allowing for consumer price inflation) since 2001, equivalent to an average annual rise of 14%. This is almost 10 times the 23% rise seen in the euro area.

After India, Russia recorded the next biggest increase (209%), followed by South Africa (161%). Overall, house prices across the 32 countries tracked have risen by an average of 56% in real terms.

Suren Thiru, economist at Lloyds TSB International, said that

“a house price divide appears to be opening up with the general outperformance of the housing market in emerging economies compared to more developed nations appearing to reflect the stronger economic performance of these countries.

Half of the six countries that recorded a fall in house prices over the past decade (Japan, Germany and United States) are members of the G8, the world’s eight largest economies. Japan recorded the biggest fall in house prices (-30%), followed by Ireland (-23%) and Germany (-17%).House prices have typically risen fastest in those countries with the fastest growing economies. The substantial rise in Indian house prices over the past decade is partly a reflection of the 280% rise in Indian GDP over the same period. Overall, GDP has increased, on average, by 155% in the ten countries with the biggest rises in house prices since 2001. This is almost four times the average 43% rise in GDP in the ten countries with the worst house price performance.

About the Author

Victor Jimenez
London contributor at, reporting about the City and the Eurozone economies. He regularly writes for Spanish newspaper group Prensa Ibérica--some of his features include shared work with journalists of The Daily Telegraph and the BBC.

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