EDITING |
The European Central Bank, ECB, expects a drop in housing prices due to the rise in mortgage rates.
ECB economists report in their economic bulletin in a report published on Monday that, based on a linear statistical model, for every point that rates rise, housing prices could fall by up to 5% and investment by 8% in the next two years.
But if, on the contrary, we rely on a non-linear statistical model, prices could fall by up to 9% and investments by 15%. The non-linear economic projection considers greater price sensitivity due to the low interest rate environment.
The rise in interest rates by the ECB began in July and has continued to increase, in the first quarter of 2022 the increase was 63 basis points and now in September 2022 it has been 75 points.
It is therefore expected that starting in 2023, housing prices could fall by up to 9%, but this drop will be offset by the increase in price and investment in more spacious homes.
