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Mortgage demand drops in the Eurozone.

 The net decrease in demand «was mainly driven by the gen­eral level of interest rates, lower con­sumer con­fid­ence

Haus under construction

and deteri­or­at­ing hous­ing mar­ket pro­spects», stated the sur­vey. The fig­ures «painted a pretty dire pic­ture for» the hous­ing sec­tor, said Fabio Bal­boni, an eco­nom­ist at HSBC, adding that the recent tight­en­ing of ECB mon­et­ary policy «is start­ing to feed quickly through to the credit chan­nel and, in turn, take its toll on the eco­nomy». The ECB increased its deposit rate to 2 per cent in Decem­ber from -0.5 per cent last June, rep­res­ent­ing the largest and fast­est increase in rates in the mon­et­ary union’s his­tory. The latest offi­cial fig­ures from Euro­stat showed that third-quarter house prices fell in six euro­zone coun­tries includ­ing Ger­many, Den­mark, Italy and Sweden on the pre­vi­ous three months.

Oxford Eco­nom­ics fore­casts that house prices will fall by more than 5 per cent in 2023 in many coun­tries, includ­ing Ger­many and the Neth­er­lands. Across the euro­zone, house prices are expec­ted to con­tract by 2.4 per cent, the con­sultancy added.
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