Ireland Tops European House Price Value League

by Carla Johnson, Investors Offshore.com, London

31 August 2007

In terms of growth, house prices in the UK have outperformed every country in the eurozone except Spain over the past five years, according to new research by Bank of Scotland International. But average house prices are higher in Ireland and the Netherlands.

Since 2001, house prices in the UK have risen 90%, compared with a 40% increase for the eurozone as a whole over the same period. Spain is the only country with higher house price growth than the UK in the past five years, with an increase of 100%. In the past year, Belgium experienced the largest rise in house prices of 18%, followed by France at 15% and Spain at 14%. The UK had the fourth-largest increase of 13%. Of the 12 eurozone members included in this analysis, Germany is the only country to have experienced a fall in house prices, with a fall of 5% over the past five years. Ireland saw a 71% increase in the last 5 years, with Luxembourg clocking up 58%.

Despite rising faster than the UK over the past five years, house prices in Spain are lower. The average price in Spain stood at £150,200 at the end of 2006, compared with an average of £187,100 in the UK. The average house price in Ireland (£209,300) and the Netherlands (£190,900) is higher than in the UK.

The owner-occupation rate in the UK is currently around 70%. Spain has a significantly higher owner-occupation rate of 82%, whereas the Netherlands has a lower owner-occupation rate of 55%. In Germany, the rate is even lower at 45%.

Outside the eurozone, house price growth in the UK has outperformed Australia, Canada and the United States over the past one, two and five years. The US is the only one of these countries to have recorded a fall in house prices, with a 1.3% decline in the past year.

Along with faster growth, the UK also has a higher average house price than Australia, Canada and the US. UK owner-occupation is the same as in Australia and slightly higher than the US (69%) and Canada (66%).

Tim Crawford, group economist at Bank of Scotland International, said: "UK house prices have risen more rapidly than in its eurozone neighbours over the past five years. House price growth, however, has slowed in the past couple of years compared with the likes of Belgium and France recording bigger increases. Two of the largest economies surveyed – the US and Germany – are the only ones to have seen a fall in house prices."

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