The most recent data from Eurostat shows that houses to buy in the eurozone became 1.1% cheaper again in the last quarter of 2023 compared to the previous quarter. But the residential market is already showing signs of recovery, as this decline in house prices was smaller than that observed in the summer of 2023 (-2.2%).

In Portugal, the prices of houses for sale continue to rise, having registered the 5th biggest increase among EU countries.

“In the fourth quarter of 2023, house prices, as measured by the House Price Index, fell by 1.1% in the euro area and increased by 0.2% in the European Union (EU) compared to the same quarter last year ”, reads the statistical note published by Eurostat. During this period, house rents in the EU rose by 3%.

Although this was the third annual drop in the prices of houses for sale in the eurozone, a slight recovery in this indicator is already felt, as this latest decline was smaller than that recorded in the summer of 2023 when the cost of housing fell 2.2% in the euro area and 1.1% in the EU. Behind this recovery may be the market's more optimistic perspectives regarding the European Central Bank's (ECB) interest rate cuts scheduled for June, which should reduce interest rates on housing loans. In fact, the decline in inflation in the eurozone in March to 2.4% - and higher than expected - gives more strength to this softening of monetary policy.

Where are prices falling?

Looking at the evolution of prices of houses for sale in the 26 Member States with available data (data are missing for Greece), it is observed that in eight countries there was a year-on-year decline in this indicator, with the biggest falls being recorded in Luxembourg ( -14.4%), Germany (-7.1%) and Finland (-4.4%). The other 18 EU countries recorded increases in house prices between the last quarter of 2023 and the same period last year. The largest increases were observed in Poland (13.0%), Bulgaria (10.1%) and Croatia (9.5%). Portugal is also part of this group, as houses became 7.8% more expensive between these two moments, this being the fifth biggest increase among EU countries.

Compared to the third quarter of 2023, house prices fell by 0.7% in the euro area and 0.3% in the EU in the fourth quarter of 2023, while house rents increased by 0.6% in the 27 Member States in the same period.