The ECB estimates that house prices will fall by up to 9% due to the rise in mortgage rates

• Housing The cocktail that increases the residential insecurity of young people

The European Central Bank (ECB) estimates that house prices in the eurozone as a whole will register a decrease of up to 9% in the next two years as a result of

.

In an article published in its 'Economic Bulletin', several economists from the institution have explained that in the first quarter of 2022 there has been an increase in mortgage interest rates of 63 basis points, which represents the largest six-monthly increase never registered.

perspectives

Living place.

The great world real estate bubble... about to burst?

• Drafting: MARÍA HERNÁNDEZ |

  LUCAS OF THE LIME |

  PETER POZA |

  MARIA SIERRA

The great world real estate bubble... about to burst?

Living place.

Alarms, home insurance, payroll... Subsidized mortgages gain ground to face the escalation of the Euribor

• Drafting: MARÍA HERNÁNDEZMadrid

Alarms, home insurance, payroll... Subsidized mortgages gain ground to face the escalation of the Euribor

In this sense, they have added that this rise will have effects on both housing prices and real estate investment.

According to a linear projection prepared by ECB technicians, an increase of one percentage point in mortgage rates causes a 5% drop in house prices after two years, as well as an 8% drop in real estate investment.

However, if a non-linear projection is taken into account to take into account higher price sensitivity due to the low interest rate environment, the impact of that one percentage point increase is doubled.

In this way,

%.

However, part of the decline in house prices could be offset by higher prices and investment in more spacious homes further from city centers to adjust to changing household preferences after the pandemic.

Conforms to The Trust Project criteria

Know more

• mortgages

• living place