S&P says euro crisis will drive housing lower

 
Ben Southwood
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EUROPEAN house prices are set to decline yet further in 2013, according to predictions from credit ratings agency Standard & Poor’s (S&P).

Spanish houses will lose around 7.8 per cent during the coming year, it forecasts, as the Eurozone debt crisis continues to hit the bloc’s fourth biggest economy.

Core countries like France and the Netherlands will fare little better, the outlook predicts. The Dutch and French housing declines look to be accelerating, according to S&P, and will see a further five or six percentage points wiped off housing values in 2013.

Only the region’s powerhouse economy, Germany, will be able to shrug off debt and demand woes, with S&P predicting growth of around three per cent in German residential prices, as a robust labour market delivers solid wage hikes even in the dire European economic climate.

But the ratings group sees the gloom as mainly short-term, and expects the long-term to herald continued growth, with population growth, particularly in France, the UK and the Netherlands squeezing an inelastic supply of housing stock.