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, independent of their final use and of their previous owners.
The index levels (2015 = 100) for house prices of the euro area and EU aggregates are shown in Figure1. 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. A rapid rise followed in early 2015, and house prices increased faster than rents until the third quarter of 2022. Since the fourth quarter of 2022, house prices fell for two quarters in a row before rising again in the second and third quarters of 2023 and declining slightly in the fourth quarter.
Figure 1: House Prices – Euro area and EU aggregates – Index levels, 2010Q1-2023Q4 (2015 = 100)
Source: Eurostat (prc_hpi_q)
The annual growth rate of the euro area and EU HPIs from the first quarter of 2010 to the fourth quarter of 2023 are presented in Figure2. Looking at the entire period, the annual growth rate for the euro area HPI reached a maximum of +9.8% in the first quarter of 2022 and a minimum of -2.6% last recorded in the first quarter of 2013. For the EU HPI, the annual growth rate reached a maximum of +10.4% in the first quarter of 2022 and a minimum of -2.6% in the first quarter of 2013. Between 2016 and 2019, the annual growth rate has remained rather stable for both the euro area and the EU (between +3.5% and +5.0%). Starting in the first quarter of 2020, the annual growth rates for both the euro area and the EU increased to levels that had not been recorded since 2006. After the peak of the first quarter of 2022, the annual growth rates decreased. They became negative in the second quarter of 2023 (-1.6% for the euro area and -1.0% for the EU) and in the third quarter of 2023 (-2.2% for the euro area and -1.1% for the EU). In the fourth quarter of 2023, the annual growth rate remained negative for the euro area (-1.1%), but turned positive for the EU (+0.2%).
Figure 2: House Prices – Euro area and EU aggregates – Annual rates of change, 2010Q1-2023Q4 (%)
Source: Eurostat (prc_hpi_q)
Table1 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, eight showed an annual decrease in house prices in the fourth quarter of 2023, and eighteen showed an annual increase. The largest falls were registered in Luxembourg (-14.4%), Germany (-7.1%), and Finland (-4.4%), while the highest increases were recorded in Poland (+13.0%), Bulgaria (+10.1%) and Croatia (+9.5%).Compared with the previous quarter, prices decreased in eleven Member States, were stable in one (Italy) and increased in fourteen Member States. The largest falls were registered in France (-2.7%), Latvia (-2.5%) as well as Sweden and Denmark (both -2.3%), while the highest increases were recorded in Poland (+4.8%), Croatia (+3.4%) and Ireland (+3.0%).
Table 1: House Prices – Quarterly and annual rates of change, 2023Q1-2023Q4 (%)
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 the Eurostat website and the 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 very 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 Figure3 (quarterly index) and Figures4 and 5 (annual rate of change).
Between 2010 and 2014, the decreasing trend (or negative annual rates of change) reflects the fact that house prices in the euro area either decreased or increased less than inflation. In 2015, house prices started to rise more than inflation and, between 2016 and 2021, house prices increased 3.0% to 5.5% more than inflation. In 2022, house prices rose just a bit above inflation (+0.3%) and in 2023, they decreased in a context of high inflation leading to a significant decrease of 6.8% of the annual deflated house price.
There are significant differences between EU Member States, as can be seen in Table2 (annual deflated HPI). Figure5 illustrates the magnitude of the differences in the annual rate of change for the year 2022.
Between 2016 and 2021, house prices increased every year more than inflation in 24 to 26 EU Member States. In 2022, house prices decreased in Denmark (-0.5%) and increased less than inflation in 10 EU Member States. In 2023, house prices decrease in 9 EU Member States, increased less than inflation in 13 EU Member States and increased more then inflation in 5 Member States (Bulgaria, Greece, Croatia, Lithuania and Portugal).
Figure 3: Deflated House Prices – Euro area – Index levels, 2010Q1-2023Q4 (2015 = 100)
Source: Eurostat (tipsho30)
Figure 4: Annual deflated House Prices – Euro area – Rates of change, 2010-2023 (%)
Source: Eurostat (tipsho10)
Table 2: Annual deflated House Prices – EU Member States - Rates of change, 2010-2023 (%)
Source: Eurostat (tipsho10)
Figure 5: Annual deflated House Prices – EU Member States – Rates of change, 2023 (%)
Source: Eurostat (tipsho10)
Long term trends in house prices and rents
Figure6 and Figure7 below show the long term trends of house prices and rents (since 2010).
From 2010 until the fourth quarter of 2023, in the EU, rents increased by 22.8% and house prices by 47.9%. In the EU, in the fourth quarter of 2023, when compared with the same period in 2022, rents increased by 3.0% and house prices increased by 0.2%. In the fourth quarter of 2023, rents in the EU increased by 0.6% and house prices decreased by 0.3% compared with the third quarter of 2023. This decrease of house prices follows two increases (+0.5% in the second quarter of 2023 and +0.7% in the third quarter of 2023) just before two decreases in a row were recorded (-1.5% in the fourth quarter of 2022 and -0.7% in the first quarter of 2023).
House prices and rents in the EU followed a comparable increasing path between 2010 and the second quarter of 2011. After this quarter, house prices and rents have evolved differently. While rents increased steadily throughout this period up to the second quarter of 2023, house prices fluctuated considerably. 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. A rapid rise followed in early 2015, and house prices increased faster than rents until the third quarter of 2022.
Since the fourth quarter of 2022, house prices fell for two quarters in a row before raising again in the second and third quarters of 2023 and declining slightly in the fourth quarter 2023.
When comparing the fourth quarter of 2023 with 2010, among the Member States for which data are available, house prices increased more than rents in 19 of the EU countries. House prices more than doubled in Estonia (+217%), Hungary (+185%), Lithuania (+162%), Latvia (+135%), Czechia (+123%), Austria (+111%), and Luxembourg (+102%). Decreases were observed in Italy (-8%) and Cyprus (-3%).
Rents increased in 26 EU countries with the highest rises in Estonia (+207%), Lithuania (+172%) and Ireland (+102%). The only decrease in rent prices was recorded in Greece (-19%).
Figure 6: House prices and rents – EU – Index levels, 2010Q1-2023Q4 (2010 = 100)
Source: Eurostat (prc_hpi_q); (prc_hicp_midx)
Figure 7: House prices and rents – Changes between 2010 and 2023Q4 (%)
Source: Eurostat (prc_hpi_a); (prc_hpi_q); (prc_hicp_aind); (prc_hicp_midx)
Weights for the calculation of house price indices
Weights for the euro area and the EU
The HPI for the euro area and EU aggregates are calculated as weighted averages of the national HPIs, currently using for the year before, the GDP at market prices (based on PPS), price updated with the HPI of the fourth quarter of the countries concerned. The weights used in 2023 are based on GDP of 2022 and HPI of the fourth quarter of 2022.
HPIs are computed as Laspeyres-type annual chain indices allowing weights to be changed each year.
Figure8 shows the country weights used for the calculation of the 2023 EU HPI aggregates.
Figure 8: Country weights for total House Prices, EU, 2023 (%)
Source: Eurostat (prc_hpi_cow)
Figure9 shows the country weights used for the calculation of 2023 the euro area HPI aggregates.
Figure 9: Country weights for total House Prices Index, euro area, 2023 (%)
Source: Eurostat (prc_hpi_cow)
Weights for newly built 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.
The weights of the indices for newly built and existing dwellings are disseminated as parts per thousand of the expenditure (with total dwellings = newly built dwellings + existing dwellings = 1000). The weights for the 2023 indices are illustrated in Figure10, for the EU, the euro area and available countries.
Figure 10: Weights of newly built and existing dwellings in total dwellings – EU Member States, 2023 (‰)
Source: Eurostat (prc_hpi_inw)
Source data for tables and graphs
House Price Index - Release fourth quarter 2024
Data sources
Methodological background information is given in the Handbook on Residential Property Prices Indices (RPPIs) and the Technical Manual on Owner-occupied Housing and House Price Indices.
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 newly built 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.
Context
The basic act providing for the compilation of the House price index (HPI) and the Owner-occupied housing price index (OOHPI) is the European Parliament and Council Regulation (EU) 2016/792 of 11 May 2016.
The basic act is implemented by Commission Regulation (EU) 2023/1470, of 17 July 2023.
In the context of this publication, 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 newly built 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.
