Home Business The brick is hot, ECB launches real estate bubble alert: house prices have risen a lot in various EU areas (including Lombardy)

The brick is hot, ECB launches real estate bubble alert: house prices have risen a lot in various EU areas (including Lombardy)

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The euro zone real estate market is at risk of a bubble. Thus the ECB in its semi-annual report according to which with families who have accumulated savings during the quarantine and with a growing number of people working from home, the demand for owned homes is growing, leading to an increase in prices of more than 7%, at the highest rate since 2005.
“The risks of a medium-term price correction have increased substantially, given rising estimates of an overvaluation of house prices,” the report reads. Despite the resurgence of residential construction, labor shortages, supply bottlenecks and rising production costs are weighing on the sector’s ability to increase housing supply, which pushes prices up. of homes “, according to the ECB.
The Eurotower notes that house prices are rising sharply in many areas of Europe, including Lombardy. While the high-value commercial construction sector picks up, the outlook is “particularly poor” for lower-quality commercial construction, with remote working, health concerns and the rush for greener properties that channel demand to the high-value segment.
In general, the ECB says it is concerned about pockets of exuberance in the markets, which include real estate, as well as corporate and public sector debt created by the pandemic.

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