Housing price statistics - house price index


Data from first quarter of 2021.

Next planned update: 7 October 2021.

Highlights


House prices up by 5.8 % in the euro area and by 6.1% in the European Union in the first of 2021, compared with the same quarter of 2020.

House prices rents Q12021 vis 1.jpg

This article describes the house price index (HPI) in the euro area (EA-19) and the European Union (EU-27), presenting data on this indicator both at European and Member State level. It also provides examples of possible use of this indicator in relation to other statistics, such as consumer price indices and rent price indices. Finally, a summary description of the methodology used in the compilation of the HPI is given.


Full article


Annual and quarterly growth rates

The HPI shows the price changes of residential properties purchased by households (flats, detached houses, terraced houses, etc.), both newly-built and existing ones, independently of their final use and independently of their previous owners.

The index levels (2015 = 100) for the euro area aggregate and EU aggregate house price indices are shown in Figure 1. After a slight increase between the first quarter of 2010 and the second quarter of 2011, house prices showed a sharp decline until the first quarter of 2013. Then, they remained more or less stable until 2014 and rose rapidly and constantly since early 2015. Both the euro area and the EU follow a similar trend.

Figure 1: House Prices – Euro area and EU aggregates – Index levels (2015 = 100), 2010Q1-2021Q1 – Source: Eurostat (prc_hpi_q)

The annual growth rate of the euro area and EU HPIs from the first quarter of 2010 to the first quarter of 2021 are presented in Figure 2. Looking in detail at the entire period, the annual growth rate for the euro area HPI reached a maximum of +5.8 % in the first quarter of 2021 and a minimum of -2.7 % in the first quarter of 2013. For the EU HPI, the annual growth rate reached a maximum of +6.1 % in the first quarter of 2021 and a minimum of -2.6 % in the second and third quarters of 2012. Between 2016 and 2019, the annual growth rate has remained rather stable for both the euro area and the EU (between +3.7 % and 5.0 %). Since the first quarter of 2020, the annual growth rate for both the euro area and the EU reached again levels that had not been recorded since 2007 (between +5.0 % and +6.1 %).

Figure 2: H House Prices – Euro area and EU aggregates – Annual rates of change, 2010Q1-2021Q1 (%) – Source: Eurostat (prc_hpi_q)

Table 1 presents the quarterly and annual rates of change for the HPI for the most recent four quarters.

Among the Member States for which data are available, the highest annual increases in house prices in the first quarter of 2021 were recorded in Luxembourg (+17.0 %), Denmark (+15.3 %), Lithuania (+12.0 %), Czechia (+11.9 %) and the Netherlands (+11.3 %), while prices fell only in Cyprus (-5.8 %).

Compared with the previous quarter, the highest increases were recorded in Estonia (+6.6%), Denmark (+5.8 %%) and Lithuania (+5.0 %), while decreases were observed only in Cyprus (-5.8 %), Malta (-1.6 %) and Slovakia (-1.2 %).

Table 1: House Prices – Quarterly and annual rates of change, 2020Q1-2021Q1 (%) – Source: Eurostat (prc_hpi_q)


Dynamics in the housing market: uses of the house price index and policy implications

The HPI has been used in conjunction with other macroeconomic statistics to build derived indicators for the analysis of the housing market dynamics.

A well-known example is the deflated (or real) house price index, which is part of the Scoreboard of indicators used in the Macroeconomic Imbalances Procedure (MIP) of the European Commission. See the dedicated section on Eurostat website and ECFIN web page.

The deflated HPI is the ratio between the nominal HPI and an index of consumer price inflation. A consumer price index, such as the HICP, or a national accounts final consumption deflator can be used for stripping out consumer prices inflation from the HPI. The deflated HPI included in the MIP Scoreboard and in this publication uses the national accounts household final consumption deflator. The deflated HPI growth rate is a key variable for the analysis of house price cycles. In particular, a too high growth rate is considered an early warning indicator of tensions in the real estate market signalling the risk of price bubbles. The alarm threshold adopted in the context of the MIP is 6 % of annual growth rate in the deflated HPI. The level of the threshold was established by the European Commission. It was set on the basis of an analysis of historical data on past boom and bust cycles of house prices.

The deflated HPI for the euro area is presented in Figure 3 (quarterly index) and Figure 4 (annual rate of change).

Between 2010 and 2014, the decreasing trend (or negative annual rate of change) reflects the fact that house prices in the euro area decreased or increased less than inflation. In 2015, house prices started to increase more than inflation and, since 2016, house prices increased 3.0 % to 4.7 % more than inflation.

There are significant differences between Member States, as can be seen in Table 2 (annual deflated HPI). Figure 5 illustrates the magnitude of the differences in the annual rate of change for the year 2020.

For the first time at least since 2001, in 2020, house prices increased more than inflation in all EU countries. The highest differences between annual changes of house prices and the annual inflation rate were recorded in Luxembourg (+13.3 %), Croatia and Portugal (+7.4 % each) and Slovakia (+7.2 %).

Figure 3: Deflated Deflated House Prices – Euro area – Index levels (2015 = 100), 2010Q1-2021Q1 – Source: Eurostat (tipsho30)


Figure 4: Annual deflated House Prices – Euro area – Rates of change, 2010-2020 (%) – Source: Eurostat (tipsho10)


Table 2: Annual deflated House Prices – Member States - Rates of change, 2010-2020 (%) – Source: Eurostat (tipsho10)


Figure 5: Annual deflated House Prices – Member States – Rates of change, 2020 (%) – Source: Eurostat (tipsho10)

Long term trends in House prices and rents

Figures 6 and 7 below show the long term trends of house prices and rents (since 2010).

Over the period 2010 until the first quarter of 2021, rents increased by 15.3 % and house prices by 30.9 %.

Rents and house prices in the EU have continued their steady increase in the first quarter of 2021, going up by 0.4 % and 2.2 %, respectively, compared to the fourth quarter 2020.

Between 2010 and the second quarter of 2011, house prices and rents in the EU followed similar paths. Since the second quarter of 2011, they have followed very different paths: while rents increased steadily throughout the period up to the first quarter of 2021, house prices have fluctuated significantly.

After a sharp decline between the second quarter of 2011 and the first quarter of 2013, house prices remained more or less stable between 2013 and 2014. Then, there was a rapid rise in early 2015, since when house prices have increased at a much faster pace than rents.

When comparing the first quarter of 2021 with 2010, house prices increased more than rents in 17 EU Member States. House prices increased in 23 Member States and decreased in four, with the highest rises in Estonia (+126.8 %) and Luxembourg (+108.2 %). Decreases were observed in Greece [1] (-28.1 %), Italy (-14.4 %), Cyprus (-8.9 %) and Spain (-4.8 %).

For rents, the pattern was different. When comparing the first quarter of 2021 with 2010, prices increased in 25 EU Member States and decreased in two, with the highest rises in Estonia (+140.4 %), Lithuania (+108.6 %) and Ireland (+63.3 %). Decreases were recorded in Greece (-25.2 %) and Cyprus (-3.8 %).

Figure 6: House prices and rents – EU – Index levels (2010 = 100), 2010Q1-2021Q1 – Source: Eurostat (prc_hpi_q); (prc_hicp_midx)


Figure 7: House prices and rents – Changes between 2010 and 2021Q1 (%) – Source: Eurostat (prc_hpi_a); (prc_hpi_q) (tipsho20); (prc_hicp_aind); (prc_hicp_midx)

Weights for the calculation of house price indices

Weights for the euro area and the EU

The House Price Indices (HPI) for the euro area and EU aggregates are calculated as weighted averages of the national HPIs, currently using as weights the GDP at market prices (based on PPS) of the countries concerned. The weights used in 2021 are based on data for 2020.

HPIs are computed as Laspeyres-type annual chain indices allowing weights to be changed each year.

Figure 8 shows the 2020 weights used for the calculation of the 2021 EU HPI aggregates.

Figure 8: Weights of Member States in the EU House Prices aggregate, 2020 (%) – Source: Eurostat (nama_10_gdp)

Figure 9 shows the 2020 weights used for the calculation of 2021 the euro area HPI aggregates.

Figure 9: Weights of Member States in the euro area House Prices aggregate, 2020 (%) – Source: Eurostat (nama_10_gdp)

Weights for new and existing dwellings sub-indices

In addition to the price index for total dwellings transacted in the market, Eurostat publishes separate indices for newly built and existing dwellings. The separation of dwellings into newly built and existing is relevant due to their often different price evolutions. Due to limited data availability, no European aggregates are compiled for these sub-categories.

The weights of the indices for new and existing dwellings are disseminated as parts per thousand of the expenditure (with total dwellings = new dwellings + existing dwellings = 1 000). The weights for the 2021 indices are illustrated in Figure 10, for available countries.

Figure 10: Weights of new and existing dwellings in total dwellings – Member States, 2021 (‰) – Source: Eurostat (prc_hpi_inw)

Source data for tables and graphs

Data sources

Methodological background information is given in the Handbook on Residential Property Prices Indices (RPPIs) .

Compilation

The first and most important issue in the compilation of HPI is the availability of data on dwelling purchases. This refers to information about the price of the transaction and the dwelling characteristics. The dwelling characteristics which most influence price are the type of dwelling (flat, detached house, terraced house, etc.), its size and location. A second issue is the heterogeneity of the housing market, where virtually every dwelling bought and sold is different from the others in some respect. The consequent quality adjustment from one time period to the next is also a major methodological issue in compiling house price indices. The HPI should be seen as an independent price index aimed at measuring price developments for dwellings transacted in the market. The main technical characteristics of the HPI are:

  • the price of land is included in the price and in the weight (gross acquisition concept);
  • only actual transactions of dwellings are covered;
  • market prices for residential properties are covered, while non-market prices are ruled out of the scope of the HPI; meaning that self-built dwellings are excluded, with the possible exception of turnkey pre-fabricated houses;
  • the focus is on the measurement of price developments for all residential properties purchased by households, independently of their final use; so dwellings bought by households for uses other than owner-occupancy are included, for example for investment;
  • all purchases of new and existing dwellings are to be considered, independently of their previous owner; so existing dwellings transacted between households are included.

Prices cover the acquisition cost of a property in itself, and not the total cost that is necessary to acquire, own and maintain a residential property; so other costs related to the acquisition of the property and major repairs are ruled out from its scope.

Additional information on national house price data

Below you can find the available links to the national statistical institutes' websites dealing with housing price statistics. These links contain, in some cases, additional data on housing or methodological notes regarding the compilation of house price indices. Where there is no specific link on housing, a general link to the NSI website is provided.

  • Belgium: data provided by Statbel, the Belgian statistical office.
  • Czechia: data provided by the Czech Statistical Office can be found here.
  • Ireland: Central Statistics Office Ireland (OOH project), Residential Property Price Index (RPPI); data can be accessed at the website of the Central Statistics Office.
  • Spain: data based on OOH pilot study, provided by INE (complemented with Eurostat estimates for 2005Q1-2005Q3 based on non-harmonised data); the link to the INE website dealing with housing price index: Methodology and results (press release, quarterly series, annual averages indices and weightings) are available therein.
  • Italy: provisional data provided by the Italian National Institute of Statistics; see press release and methodological note in English and Italian version.
  • Latvia: data based on OOH pilot study provided by Central Statistical Bureau of Latvia (complemented with Eurostat estimates based on non-harmonised data for 2005); link to the website of Central Statistical Bureau of Latvia; link to the short-term data and annual data - HPI statistics database, domain 'Consumer prices'.
  • Lithuania: Statistics Lithuania data about Housing price statistics can be found in the Database of indicators => Economy and finance (macroeconomics) => Price indices, changes and prices => House price index (HPI), price changes and index weights => Owner-occupied housing price index, price changes and index weights.
  • Luxembourg: data based on OOH pilot study (complemented with estimates) provided by the National Statistical Institute of Luxembourg (STATEC); methodological information available on STATEC’s website for the HPI.
  • Hungary: data provided by the Hungarian Central Statistical Office; a publication on home prices is available on the website of the Hungarian Central Statistical Office: Housing prices, housing price index, a series of statistical tables are also published in the annex.
  • Austria: data based on OOH pilot study, provided by Statistics Austria (complemented by Eurostat with non-harmonised estimates for the years 2005-2008).
  • Portugal: sources for 2009Q1-onwards, House Price Index (Statistics Portugal), methodology available on the website of Statistics Portugal (in Portuguese only); for 2008, price indexes estimated by Statistics Portugal using bank appraisals data; for the 2005Q1-2007Q4, Eurostat’s estimates based on non-harmonised data.
  • Romania: data based on OOH pilot study, provided by the National Statistical Institute of Romania (complemented by Eurostat with non-harmonised estimates for the years 2005-2008). The document on which HPI data are published is the 'Prices statistical bulletin'; information and data on dwelling price indices can be found at the Methodological Note and in the table for 'Residential Property Price Indices'.
  • Slovakia: data based on OOH pilot study, provided by the Statistical Office of the Slovak Republic (complemented with Eurostat estimates for the year 2005 based on non-harmonised data); link to the website of the Statistical Office of the Slovak Republic.
  • Sweden: data based on OOH pilot study, provided by Statistics Sweden can be found here.
  • Iceland: data provided by Statistics Iceland; currently Statistics Iceland doesn't have a special page or metadata for the house price index; the Icelandic house price index can be found here.
  • Norway: data provided by Statistics Norway. For more information on the Norwegian HPI see here.

Context

In recent years, the analysis of housing markets has intensified as has the demand for high quality statistics on national, euro area and EU housing, in particular on residential property price indices. Eurostat and the national statistical institutes have been working together since 2002 on a series of pilot projects to set up a system to provide harmonised data for residential property prices at European level. Prior to this work, there was very little comparability between national data on housing prices within the EU. The development of comparable, timely and frequent statistics on changes in residential property prices has been considered an essential target for European statistics.

In this context, the terms 'residential property price', 'house price' and 'dwelling price' are used interchangeably to describe the price developments of all residential properties purchased by households (flats, detached houses, terraced houses, etc.), both new and existing, independent of their final use and independent of their previous owners. The emphasis is on market prices, with non-market prices being ruled out from the scope of the house price indices (self-build dwellings are therefore excluded. The price of dwellings follows a gross acquisition concept, i.e. it includes the land price component.

Notes

  1. House Prices: Instead of 2021Q1 data, 2020 annual estimate by Bank of Greece.
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